An Analysis of Deep Decarbonization Trends in China’s Industrial Sector

This report by RMI analyzes trends in the deep decarbonization of China's industrial sector, which accounts for over 65 percent of the nation's energy consumption and over 70 percent of its carbon emissions. The analysis identifies five key trends: energy efficiency improvements, the scaling of recycling and reuse, increased electrification, the development of carbon capture, utilization, and storage (CCUS), and the growth of hydrogen utilization.

• China's industrial sector has historically been the largest contributor to national energy efficiency improvements, though the rate of decline in energy consumption per unit of industrial added value is slowing. In 2017, this decline was 4.6 percent, and it was expected to drop to 3.5 percent in 2018. Policy efforts include the 2018 revision of The Administrative Measures on Energy Conservation in Key Energy-Using Departments and the issuance of The Key Work Plan for Industrial Energy Conservation Supervision, which targets over 5,500 enterprises in sectors such as paper, chemical, and petrochemical industries.
• The scaling of 'recycle and reuse' is reducing demand for carbon-intensive materials, particularly in steel and plastics. Using waste steel in steelmaking saves more than 60 percent of the energy compared to regular processes. In the first nine months of 2018, China's waste steel consumption reached 141 million tons, a 38.9 percent increase over the same period in 2017, allowing the country to meet its 13th Five-Year Plan goal for waste steel consumption (20 percent of crude steel production) two years and three months early.
• Industrial electrification is a key component of China's energy transition. To keep global temperature rise below 2°C, the end-use sector's electrification rate must increase from 24 percent in 2017 to 53 percent by 2050. Specifically for the industrial sector, the electrification rate is projected to reach 39 percent in 2050, up from 19 percent in 2010, driven in part by replacing industrial coal kilns and boilers with electric versions.
• China is increasing its focus on carbon capture, utilization, and storage (CCUS) through demonstration projects in chemical production, oil displacement, and CO2 capture and storage, primarily involving coal chemical enterprises and coal-fired power plants. However, the industry faces significant hurdles regarding high costs, insufficient technical capacity, and a lack of coordinated policy and legal mechanisms.
• Hydrogen energy is emerging as a critical tool for industrial decarbonization in China, with the 2018 establishment of the National Alliance of Hydrogen and Fuel Cell and the launch of industrial parks in Liaoning, Shanghai, Shanxi, and Wuhan. While hydrogen is used as a fuel and a reducing agent in the chemical and steel industries, the sector still requires breakthroughs in infrastructure, crucial technologies, and top-level policies.

APA

RMI (2019). An Analysis of Deep Decarbonization Trends in China’s Industrial Sector. https://rmi.org/resources/an-analysis-of-deep-decarbonization-trends-in-chinas-industrial-sector/

Chicago

RMI. An Analysis of Deep Decarbonization Trends in China’s Industrial Sector. 2019. https://rmi.org/resources/an-analysis-of-deep-decarbonization-trends-in-chinas-industrial-sector/.

Wikipedia

{{cite report |author=RMI |title=An Analysis of Deep Decarbonization Trends in China’s Industrial Sector |date=15 May 2019 |url=https://rmi.org/resources/an-analysis-of-deep-decarbonization-trends-in-chinas-industrial-sector/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2019analysis, author = {{RMI}}, title = {{An Analysis of Deep Decarbonization Trends in China’s Industrial Sector}}, institution = {RMI}, year = {2019}, month = may, url = {https://rmi.org/resources/an-analysis-of-deep-decarbonization-trends-in-chinas-industrial-sector/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }