Blog Post | 05.09.2025 | 5 min read | Zehao Yu
How China’s largest steelmaker is leading the charge toward carbon neutrality through innovation, green infrastructure, and next-generation technologies.
As China accelerates its transition to a low-carbon economy, China Baowu Steel Group (hereinafter referred to as “Baowu Group”) emerges as a key player in the nation’s zero-carbon vision. From pioneering electric arc furnace technology to building low-carbon steel mills in Zhanjiang, Baowu Group is redefining what sustainable heavy industry looks like.
This blog explores how the company’s ambitious roadmap aligns with China’s dual carbon goals and sets a global benchmark for industrial decarbonization, strengthened by its collaboration with Hitachi Energy to deliver advanced solutions that accelerate the transition to low-carbon steelmaking.
China is undergoing a rapid transformation in its energy sector to meet the demands of its fast-growing economy. Since 2020, electricity consumption in China has outpaced GDP growth, with a 6.7% increase in electricity use in 2023 compared to a 5.2% GDP rise¹. This surge is driven by industrial expansion and the growing energy needs of emerging technologies like artificial intelligence.
To address this, China has significantly increased its investment in energy infrastructure, grid interconnections and upgrades, and energy storage to better integrate renewable energy sources and ensure a stable power supply.
At the same time, China is aggressively pursuing its decarbonization goals under its "dual carbon" strategy—peaking carbon emissions before 2030 and achieving carbon neutrality by 2060. The country has already met its 2030 wind and solar capacity targets six years ahead of schedule, and is expanding its renewable energy infrastructure at an unprecedented pace.
Policies are being implemented to promote green finance, electric vehicles, and stricter emissions standards, all aimed at accelerating the transition to a low-carbon economy.
The 14th Five-Year Plan2 emphasizes controlling total energy consumption, curbing high-emission projects, and fostering innovation in clean technologies. These efforts position China as a leading economy in renewable energy deployment and climate action, even as it balances the challenges of energy security and economic growth.
China has set ambitious climate targets, pledging to reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060, and is building a comprehensive framework of policies and projects to make this vision a reality.
As part of this wider effort, China brings together measures that promote clean energy adoption, green infrastructure, and sustainable industrial transformation. For example, it drives investment in zero-carbon technologies such as industry, energy storage, and carbon capture, reflected also in the rapid growth of patents in the solar and wind sectors.
The country also supports the development of zero-carbon industrial parks, which integrate solar, wind, and hydropower with smart energy management, green building design, circular economy models, and digital infrastructure to achieve close to net-zero operations.
Among the sectors most impacted is steel, which accounts for about 15% of China’s total emissions and remains the largest and most carbon-intensive steel industry in the world. To align with national decarbonization goals, the government is pushing structural change in this sector by reducing production capacity and expanding the use of electric arc furnace (EAF) steelmaking, paving the way for significant reductions in carbon intensity.
These EAFs, which use scrap steel and can be powered by renewable electricity, emit up to 85% less CO₂ than traditional coal-based blast furnaces. In addition, China is investing in advanced technologies such as hydrogen-based steelmaking and carbon capture, utilization, and storage (CCUS), aiming for 30% of steel capacity to meet top energy efficiency standards and 80% to achieve ultra-low emissions. These efforts are supported by strict regulatory controls, green finance mechanisms, and international partnerships.
Baowu Steel Group is at the forefront of China's steel industry decarbonization efforts. The group has laid out a comprehensive action plan to peak carbon emissions across its major production bases and achieve the technical capability to reduce emissions. Baowu Group aims to cut its carbon emissions by 30% by 2035 and reach full carbon neutrality by 2050. This roadmap includes transforming traditional steelmaking processes, upgrading its energy structure, and accelerating the development of low-carbon technologies.
The company is also investing heavily in R&D and innovation to support these goals, positioning itself as a pioneer in low-carbon steel production.
One of Baowu Group’s flagship projects is the near-zero carbon steel mill under construction in Zhanjiang, Guangdong Province. With a total investment of 4.5 billion yuan (approximately $622 million), the facility is expected to be completed by the end of 2025.
It will feature a 220-ton electric arc furnace (EAF) powered by green electricity and fed with direct reduced iron (DRI) and scrap steel. This approach significantly reduces carbon emissions compared to traditional blast furnace methods.
Baowu Group’s decarbonization strategy is not limited to infrastructure upgrades. The company is also implementing a carbon management system across its operations, starting with its Ma’anshan Iron & Steel plant. This system encompasses carbon trading, asset management, and emissions monitoring, ensuring a data-driven approach to sustainability.
By integrating green electricity, hydrogen-based metallurgy, and advanced digital tools, Baowu Group is aligning closely with China’s national goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060. These initiatives not only enhance Baowu Group’s competitiveness in global markets but also serve as a model for sustainable industrial transformation in heavy manufacturing.
Baosteel, a leading subsidiary of Baowu Group, and Hitachi Energy have worked together to define and engineer the required advanced transformer solutions for EAF operations at their Zhanjiang plant to keep advancing the decarbonization of the steel industry in China.
Explore the customer story below to discover how this collaboration has been brought to life and how Hitachi Energy’s largest-ever furnace transformer in China is powering Baosteel’s groundbreaking zero-carbon steel project.
In it, you’ll learn how advanced transformer engineering overcame the technical challenges of high-capacity EAF operations, why this project marks a milestone for both Baosteel and China’s steel industry, and how it sets a new global benchmark for sustainable steelmaking.
Ensure sustainable and smarter energy solutions for the metal industry while improving operational efficiency with Hitachi Energy transformers
