POTENTIAL ROLE OF SECTORAL APPROACH (SA) FOR CARBON EMISSION REDUCTION IN INTERNATIONAL CLIMATE MECHANISM

The document assesses various Sectoral Approach (SA) models for the Chinese iron and steel (I&S) industry, concluding that ex-post crediting based on carbon intensity reduction targets is the most suitable methodology. It identifies the I&S sector as a critical area for China to meet its 2020 carbon intensity reduction target of 40% to 45%. The study projects that under a 'technology penetration enhanced scenario', emission intensity could decrease by 34% by 2020 compared to 2005 levels, generating up to 709 million tons of CO2 emission reduction credits by 2030. Key barriers to implementation include poor data availability, commercial sensitivity, and the high heterogeneity of technology levels across enterprises.

• The iron and steel (I&S) sector is identified as the largest industrial sector for greenhouse gas emission reduction in China and is essential for achieving the national target of a 40% to 45% carbon intensity reduction by 2020.
• Among the evaluated Sectoral Approach (SA) options, an ex-post crediting approach based on carbon intensity reduction targets is deemed most suitable for the I&S sector because it aligns with national targets and is more acceptable to enterprises than absolute emission caps.
• A 'technology-based SA', where reductions are calculated based on the penetration of specific low-carbon technologies, is considered the most attractive option for Chinese steel companies and government due to its lower complexity and cost.
• The study projects that under a 'low-carbon scenario', the I&S industry's emission intensity in 2020 will be 26% lower than in 2005, with emission reduction credits totaling 316 million tons in 2020 and 436 million tons in 2030.
• Under a 'technology penetration enhanced scenario', emission intensity in 2020 is projected to be 34% lower than 2005 levels, with emission reduction credits reaching 518 million tons in 2020 and 709 million tons in 2030.
• China's I&S sector has high emissions largely because it relies heavily on converter steel (88% in 2008), while the proportion of electric arc furnace (EAF) steel (about 12%) is significantly lower than in Japan (27%), the EU (40%), or the US (50%).
• The implementation of SAs in China faces significant challenges regarding data quality and availability, as current industrial statistics are insufficient and company-level data is often commercially sensitive.
• The Chinese government has implemented policies to eliminate backward production capacity, including a 2010 mandate to close all blast furnaces below 300 cubic meters and converters/electric furnaces with capacity no more than 20 tons by the end of 2010.

APA

HU, X., & LIU, Q. (2011). POTENTIAL ROLE OF SECTORAL APPROACH (SA) FOR CARBON EMISSION REDUCTION IN INTERNATIONAL CLIMATE MECHANISM. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/cs-sa-china-case-study-iges.pdf

Chicago

HU, Xiulian, and Qiang LIU. POTENTIAL ROLE OF SECTORAL APPROACH (SA) FOR CARBON EMISSION REDUCTION IN INTERNATIONAL CLIMATE MECHANISM. Climate Strategies, 2011. https://climatestrategies.org/wp-content/uploads/2014/11/cs-sa-china-case-study-iges.pdf.

Wikipedia

{{cite report |last1=HU |first1=Xiulian |last2=LIU |first2=Qiang |title=POTENTIAL ROLE OF SECTORAL APPROACH (SA) FOR CARBON EMISSION REDUCTION IN INTERNATIONAL CLIMATE MECHANISM |publisher=Climate Strategies |date=February 2011 |url=https://climatestrategies.org/wp-content/uploads/2014/11/cs-sa-china-case-study-iges.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hu2011potential, author = {HU, Xiulian and LIU, Qiang}, title = {{POTENTIAL ROLE OF SECTORAL APPROACH (SA) FOR CARBON EMISSION REDUCTION IN INTERNATIONAL CLIMATE MECHANISM}}, institution = {Climate Strategies}, year = {2011}, month = feb, url = {https://climatestrategies.org/wp-content/uploads/2014/11/cs-sa-china-case-study-iges.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }