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CDM Project Activities in China’s Iron and SteelIndustry: Current Status, Barriers and DevelopmentStrategiesRong Fang a , Zeng Shaojun a b , Yu Huijin a & Lan Yuxin aa R&D Center of CDM, School of Public Policy and Management, Tsinghua University ,Beijing , 100084 , Chinab China Center for International Economic Exchanges , Beijing , 100017 , ChinaPublished online: 20 May 2013.

To cite this article: Rong Fang , Zeng Shaojun , Yu Huijin & Lan Yuxin (2010) CDM Project Activities in China’s Ironand Steel Industry: Current Status, Barriers and Development Strategies, Chinese Journal of Population Resources andEnvironment, 8:1, 47-54, DOI: 10.1080/10042857.2010.10684965

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Chinese Journal of Population, Resources and Environment Vol.8 No.1 March 2010

CDM Project Activities in China’s Iron and Steel Industry: Current Status, Barriers and Development Strategies

Rong Fang1, Zeng Shaojun1, 2, Yu Huijin1, Lan Yuxin1

1. R&D Center of CDM, School of Public Policy and Management, Tsinghua University, Beijing 100084, China2. China Center for International Economic Exchanges, Beijing 100017, China;

ence aims not only to set greenhouse gas (GHG) emission targets for Annex I countries beyond 2012, but to call for developing countries’ commitments on effective mitigation actions as well.

In 2008, China emitted 21.8% (6.90 billion tons) of the total global energy-related CO2 emissions, surpassing the United States (20.2% of the total or 6.37 billion tons) (BP, 2009). As the largest energy consumer and the largest GHG emitter, China is now facing huge pressure not only from the domestic concern of energy security but from the global community’s call for emission reduction commitment as well. China’s central government is putting climate change issue on its top priority and is proactively participating global activities in fighting climate change. China’s 11th Five Year Plan, for example, set an ambitious target for energy-ef-ficiency improvement: energy intensity of the country’s gross domestic product should be reduced by 20% from 2005 to 2010. The target can be translated into an annual reduction of over 1.5 billion tons of CO2 by 2010, making the Chinese effort one of the most significant carbon mitigation efforts in the world today (Lin et al., 2008).

The iron and steel industry, well known as one of the dominant industries in China, is the third biggest energy consumption and CO2 emitting industry in China, only after the power and construction materials industries. The total primary energy consumption in China in 2007 was 2656 million tons of coal equivalents, about 18% of which was from the iron and steel industry (NBSC, 2008). The share is slightly higher for CO2 emissions. The average carbon intensity of major iron and steel companies in China has reduced by 16%, from 885 kgce/t in 2000 to 747 kgce/t in 2005. However, it is still 10%–15% higher than the interna-tional leading level (Lan, 2008).

To improve energy efficiency and thereby reduce carbon emissions, one promising opportunity for China iron and

Abstract: China is now facing huge pressure from both the do-mestic concern of energy security and the global community’s call for emission reduction commitment. As one of the major energy consumers and greenhouse gas emitters, China’s iron and steel in-dustry has a huge clean development mechanism (CDM) potential. This article both quantitatively and qualitatively analyzes the cur-rent status of CDM project activities in the iron and steel industry in China, including characteristics of approved project types, ap-plicable methodologies, and potential technology fields. From the perspective of project implementation, the article summarizes de-velopment barriers such as high investment risk, difficulty in proj-ect identification, strict requirements on PPDs, long registration waiting time, and etc. Policy suggestions are also put forwarded to help better promote the development of CDM projects in the iron and steel industry.Key words: climate change, clean development mechanism, iron and steel industry, energy conservation

1 Introduction

Climate change is no longer questioned. The problem the world is facing now is not whether mitigation is impor-tant, but rather who should mitigate and how much should be mitigated. The United Nations Framework Convention on Climate Change (UNFCCC) stated that developed coun-tries should take the lead in mitigation. This is reflected in the Kyoto Protocol, where only the industrialized countries (Annex I) have quantified mitigation commitments. Devel-oping countries, however, are expected to contribute more than three quarters of energy-related carbon dioxide (CO2) emission growth (IEA, 2008). According to “Bali Road-map,” a new global protocol about climate change will be reached in United Nations Copenhagen Climate Change Conference this December. Although details are not yet clear, it is widely understood that the Copenhagen Confer-

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Received 21 September 2009; Accepted 11 November 2009

Corresponding author: Rong Fang (rongfang@tsinghua.edu.cn)

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steel industry is to obtain necessary capital and technol-ogy through clean development mechanism (CDM), one of the three flexible mechanisms used on the global carbon market. China is the largest producer of carbon emission reduction credits (CERs). The issued CERs in China last year reached 74 million metric tonnes of CO2 equivalents (or tCO2e), accounting for 53.8% of the global total (UNFCCC, 2009).

The CDM project activities in China iron and steel in-dustry are catching up the speed, though at present they account for less than 4% of registered projects in China. The studies on this field, therefore, are receiving more and more attention. Tang et al. (2005) and Xue et al. (2007), for example, analyzed the potential of CDM project activities in the iron and steel industry in China, including a series of energy conservation and CO2 recycle projects, and proposed strategies to better develop CDM projects in the industry. From the perspectives of developing Circular Economy, Wang (2008) qualitatively emphasized the important role that CDM may play in the iron and steel industry in China. Dou (2007) estimated the potential of CO2 emission reduc-tions in the industry by 2010 and 2020, respectively. Based on two case studies, he emphasized the importance of Vol-untary Agreement on both energy conservation and emis-sion reduction. Zeng (2009a; 2009b) proposed four mitiga-tion paths for the iron and steel industry in China, including encouragement of CDM projects, stimulation of the social-responsibility-based voluntary carbon market, undertaking strict energy auditing, and promoting emission reduction-oriented investment. He further laid out the technologies applicable to the industry to develop CDM projects, such as coke dry quenching (CDQ) technology, blast-furnace top pressure recovery turbine unit (TRT), combined cycle power plants (CCPP), and etc.

All the studies above indicated that the implementation of CDM project can provide new opportunities for Chinese iron and steel enterprises to save energy, transfer technolo-gies and obtain more profits. They described the large driv-ing force of CDM for iron and steel enterprises from the view of international policies, national regulations, and so on, the majority of which did not analyze detailed opera-tional procedures to apply for CDM project, lacking actual reference value.

Existing studies on CDM project activities in the iron and steel industry in China are most qualitative description on the important role that CDM may play in energy con-servation and emission reduction and also the major types

of CDM projects in the industry. There is lack of research that addresses the problems that exist in the implementation of CDM projects including project identification, approval, validation, registry and CER issuance.

The purpose of this article is to both quantitatively and qualitatively analyze the current status of CDM project activities in the iron and steel industry in China including characteristics of approved project types, the applicable methodologies, and potential technology fields (in section 2), analyze from the perspective of project implementation the barriers that the iron and steel industry may face during the development of potential CDM projects (in section 3), and propose corresponding recommendations and policy options (in section 4). Finally, the section 5 concludes the article.

2 Current status of CDM project activities in the iron and steel industry

2.1 Characteristic of approved CDM projects

Since Kyoto Protocol was approved in August 2002, China has been proactively making efforts to promote CDM projects. On 14 August 2009, there were 2174 projects approved by the Development and Reform Commission (NDRC), the unique designated national authority (DNA) in China, mainly in renewable energy, coal mine methane, biomass, building material, iron and steel, and some other industries. Among all of them, 82 projects are in the iron and steel industry amounting to an annual emission reduc-tion of about 25 million tCO2e (Table 1).

The annual average CERs of registered CDM projects in the iron and steel industry is about 302 000 tCO2e, larger than the average of total registered CDM projects (192 thousand tCO2e). Among all 82 iron and steel projects, those that adopt the technology of gas-steam combined cy-cle Power generation have the largest annual reduction po-tential, with an annual average CERs of 1.3 million tCO2e.

Almost all registered CDM projects in the iron and steel in China are about energy conservation and efficiency im-provement. While accomplishing the sale of CERs, iron and steel enterprises could significantly improve energy ef-ficiency by recovering such secondary energy as waste heat, gas, and top pressure that are produced during the produc-tion process.

Existing registered iron and steel CDM projects mainly adopt the following three technologies: heat recovery based

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2.3 Applicable technologies

There are three major types of technologies that can be adopted in CDM projects in the iron and steel industry. The first type is power generation based on waste heat recovery such as power generation based on CDQ and based on sin-tering ore waste heat. The second is residual gas recovery power generation including power generation based on re-sidual coke oven gas, converter gas, and blast-furnace gas, gas-steam CCPP, and blast-furnace gas fired power plant. The third is TRT power generation.

As one of the most widely adopted technologies over the world, CDQ uses inactive gas (N2 for example) instead of water to cool down the red-hot coke, and then transfers the gas heat to a steam boiler for electricity generation or heat supply. Thanks to the introduction of this technology, GHG emissions are reduced by using power generated from coke quenching waste heat instead of from the national grid or on-site power plants. It is estimated that annually CDQ can save 80 000 to 100 000 tons of coal and thereby reduce CO2 emissions of 60 000 to 80 000 metric tonnes of CO2e.

Sintering consumes up to 50% of total process energy. One major technology, named waste heat power generation, can re-use waste heat to produce electricity and indirectly reduce CO2 emissions.

Gas-steam CCPP is one of the major technologies ad-opted in the second type of projects. CCPP is characterized by two traits. First, it uses surplus blast furnace gas with a low heating value for energy recovery. Second, it combines the gas and steam turbines to improve energy transforma-tion efficiency. In the process, the blast furnace gas or mixture of blast furnace gas and coke oven gas is burned to

power generation, residual gas recovery based power gen-eration, and blast furnace top gas pressure power genera-tion. Among all three, projects that adopt the technologies recovering residual gas to generate power have the largest emission reduction potentials, for example, residual coke oven gas based power generation and gas-steam CCPP. The residual gas recovery involves the whole production process including coking, iron making, steel making, and etc. The recovering technologies were already mature and successfully implemented in many Chinese iron and steel enterprises.

The development imbalance is another characteristic of CDM projects in the iron and steel industry in China. A great number of projects have been developed in some Chinese iron and steel enterprises, such as Shagang Group, Ansteel, Jinan Iron and Steel, Nansteel, Handan Steel, and Wuhan Steel. But some have not yet done anything in the CDM market. From another perspective, this also reflects the huge potential in the iron and steel industry in China.

2.2 Applicable methodologies

There are 14 consolidated, 62 large-scale, and 41 small-scale methodologies approved by the 45th meeting of the CDM executive board (EB45). Among them, at least eight can be potentially used now in the development of CDM projects in the iron and steel industry (Table 2). There are four methodologies adopted in 82 registered CDM projects in the iron and steel in China, including ACM0004 (53), ACM0012 (24), AMS-III.Q (4), and ACM0006 (1). Since 5 July 2007, the methodology of ACM0004 was replaced by ACM0012.

Table 1 Approved CDM projects in China iron and steel industry, on 14 August 2009

Project type Technology type Number of projects Annual average CERs (tCO2e)

Energy conservation and energy efficiency improvement

Waste heat recovery 31 165 214

Residual pressure based power generation 15 116 931

Blast furnace top gas pressure power generation 9 343 060

Gas-steam CCPP 9 1 348 511

Residual gas recovery based power generation 6 279 363

Converter gas recovery 1 79 000

Others 10 89 438

New and renewable energy Blast furnace top gas pressure power generation 1 42 292

Total N/A 82 302 337

Data source: NRDC (2009).

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drive the gas turbine, and the waste gas discharged at a high temperature proceeds to a steam boiler to drive the steam turbine. The gas turbine and steam turbine then combine to generate electricity. CCPP can generate 70%–90% more electricity than a traditional steam boiler power plant.

The third type is TRT based power generation. Top pres-sure recovery turbine unit refers to the technology of using the high pressure of blast furnace gas to drive the gas tur-bine and generate electricity. Electricity regained through TRT may supply about 30% of the electricity consumed by the fans of the blast furnace and thereby reduce process en-ergy consumption.

All three types above can adopt the methodology of ACM0012. In addition, there is another applicable technol-ogy listed in the methodology of AMS.II.I, that is, to substi-

tuting wet dusting system with dry dusting system, in order to provide higher recovery efficiency to blast-furnace gas TRT. On 29 April 2006, the first dry bag dusting system (no. 4 blast furnace) in Baosteel went into operation. One year later, Baosteel’s no. 2 blast furnace went into operation. It only took 14 months for Baosteel to fully accomplish dry dusting. If the applicability conditions of the methodology of AMS.II.I can be satisfied, the successful registration of such projects can be expected in future.

3 Barriers to develop CDM project activities in the iron and steel industry

There are still many barriers to develop CDM projects in China iron and steel industry. Due to lack of enough

Table 2 Applicable Methodologies for CDM projects in the iron and steel industry

Methodology Applicability

ACM0012 Consolidated baseline methodology for GHG emission reductions from waste energy recovery projects

Project of waste heat recovery based power generation, including CDQ and sinter-ing ore waste heat power generation.

Project of residual gas recovery based power generation, such as electricity genera-tion using residual coke oven gas, converter gas and blast furnace gas recovery, CCPP, and blast furnace gas fired power plant.

Project of blast furnace TRT.

AMS-III.Q. Methodology for small-scale projects of waste energy re-covery (gas/heat/pressure)

Project that utilizes waste gas and/or waste heat at existing facilities as an energy source for cogeneration, generation of electricity, direct use as process heat, genera-tion of heat in elemental process, or generation of mechanical energy.

Project that uses waste pressure to generate electricity at existing facilities.

ACM0006 Consolidated methodology for electricity generation from biomass residues

Project of converter gas recovery.

AM0066 GHG emission reductions through waste heat utilization for pre-heating of raw materials in sponge iron manufac-turing process

Project of utilizing waste heat released from furnace(s)/kiln(s) in a sponge iron manufacturing facility to pre-heat raw material(s) for both existing and newly built facilities.

AM0068 Methodology for improved energy efficiency by modify-ing ferroalloy production facility

Projects that aim at improving energy efficiency of an existing ferroalloy produc-tion facility.

AMS-III.V Decrease of coke consumption in blast furnace by install-ing dust/sludge recycling system in steel works

Project activities of decreasing coke consumption in a blast furnace of steel works by feeding direct reduced iron (DRI) pellet into the blast furnace

AMS.II.I Increase of waste utilization efficiency of industrial equip-ment

Project of improving efficiency of waste energy power generation/heat supply in industry, mineral and mineral manufacturing sectors, for example, iron and steel industry uses wet type dedusting system to substitute dry type dedusting system to improve the recovery efficiency of blast-furnace TRT power generation system.

AMS.II.D Increase energy efficiency of industrial equipment and fuel substitution measures

The improvement of efficiency, including energy conservation (such as high ef-ficiency motor) and fuel substitution (such as substitution of steam or high pressure gas with power), and the efficiency improvement measures in specific industrial, mineral and mineral manufacture sector (such as the process of steelmaking fur-nace, paper drying and tobacco baking)

Data source: UNFCCC (2009)

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experience in implementing the applicable methodologies, for example, developers of CDM projects may face many uncertainties due to the inappropriate selection of baseline during the process of project validation and registration. It is also a big issue for the development of iron and steel CDM projects to lack of consistent and comprehensive CO2 emission data.

It requires deep knowledge from many fields to success-fully develop a CDM project in the iron and steel industry, including not only the understanding on the whole applica-tion process of a CDM project such as project approval, validation, registration and CER issuance, but the financial knowledge and detailed industrial processes of the iron and steel industry as well. Specifically speaking, below are some barriers that a developer may encounter in the imple-mentation of a CDM project.

3.1 Investment risk

It often requires a huge pre-investment to develop a CDM project in the iron and steel industry, which means huge investment risk for enterprises. The investment on CDM projects is very risky due to the characteristics of project complexity and long duration. As long as any one step of the application goes wrong, the project fails and the investment becomes suck cost. This fact on the one hand influences the investment enthusiasm of iron and steel en-terprises, and on the other hand brings out the development imbalance of CDM projects among iron and steel enter-prises.

3.2  Project identification

The first step to develop a CDM project is to identify potential ones of value. This step is especially important for the iron and steel industry because it is almost impossible now in the industry to significantly reduce CO2 emissions by just improving traditional technology and equipment. The attention, therefore, should be paid to the research and development of new technologies that can significantly save energy and reduce emissions. This is reflected by approved methodologies, almost all of which are non-traditional tech-nologies used in the iron and steel industry.

3.3 Project approval

The NDRC is the unique DNA of CDM projects in Chi-na. Below are the major issues that should receive special

attention during the process of project approval.

3.3.1 Quality control of project design document (PDD)

The DNA has strict requirements on PPDs of CDM projects in the iron and steel industry. The appropriate se-lection of baseline and monitoring methodology is one of the most important parts of PDDs, which decides project eligibility and calculation methods of emission reductions.

3.3.2 Project eligibility

Project eligibility here is referred to as the evaluation of the proposed project activity whether or not it conforms to local environmental regulations and whether or not it could have a negative impact on local environment. Project eligi-bility, important for subsequent procedures, is the essence of CDM projects, especially in the iron and steel industry. As a major energy and resource-intensive industry in China, the iron and steel industry is the most critical one to achieve our national target of energy-efficiency improvement and emission reduction. In reality, there are enterprises in some regions that are still constructing illegal projects with large investment and low-tech equipment to blindly increase the production capacity and it is really difficult to close out out-dated factories. All these confirm the importance of project eligibility of CDM projects in the iron and steel industry.

3.3.3 Reasonable price

Reasonable price is another important factor that decides whether the DNA will approve a CDM project or not. The price cannot be set too high to be competitive and at the same time cannot be too low to reduce investment risk as much as possible. The DNA in China, therefore, set a floor price in order to maintain a healthy condition of CDM mar-kets in China. Compared to other industries, it is especially important to set up reasonable prices for CDM projects in the iron and steel industry which often require large invest-ments.

3.4 Validation and registration

The project validation entity is the designated opera-tional entity (DOE) designated by the UN Executive Board (EB). The project validation includes the following three steps: stakeholder investigation and interview, documents examination and on-site audit. The purpose of stakeholder investigation and interview is to check the consistency be-tween project motivation and PDDs, stakeholders’ real at-titudes on projects, and project additionality. The DOE, for

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example, might ask about if there is any local preferential policies regarding CDQ waste heat power generation. Doc-uments examination can be done by desk to double check project eligibility. On-site audit is the major means of the DOE to learn about the status of a project to control project risk and confirm the existence of the project.

The following issues might be encountered during the validation and issuance of CDM projects in the iron and steel industry.

3.4.1 Benchmark yield selection

Benchmark yield, also called benchmark discount rate, can be served as an important tool to analyze project ad-ditionality. The majority of registered CDM projects in the iron and steel industry are about power generation based on waste energy recovery. It may become a critical issue questioned by the EB for this kind of projects whether benchmark yield is based on the iron and steel industry or the power industry.

3.4.2 Baseline selection

It is important how to select the baseline of CDM proj-ects, especially when a grid-power supply project is more economically profitable than a CDM project.

3.4.3 Third party certification

Project additionality in the iron and steel industry is usu-ally analyzed through investment barriers, technological barriers, industrial barriers and first-of-kind barriers. Ac-cording to a monitoring and verification manual, third party certification is absolutely necessary to describe these barri-ers that projects may encounter.

3.4.4 Parameters selection

It is required for CDQ projects to explain the selection of parameters in the sensitivity analysis (especially omitting reasons for two important parameters, the running time of coke oven and the amount of coke used).

3.4.5 Registration time

The long duration from the approval by the NRDC to the registration by the DOE discourages investment enthu-siasm of iron and steel enterprises. It took Laisteel as an example, as long as 18 months to register the power gen-eration project of 25MW based on residual gas recovery. The project was approved by the NDRC on 13 July 2007 and was successfully registered on 16 January 2009. By

16 February 2009, there have been 20 CDM projects regis-tered for China iron and steel industry (Table 3), account-ing for less than one quarter of the total approved by the NRDC.

3.5 Project execution

If a CDM project is successfully registered and CERs are issued, the next important issue is the execution of the project. The purpose of CDM projects is to put enterprises into better positions on research and development on energy conservation technologies. The EB, therefore, is expected to conduct daily monitoring during the execution of projects. For CDM projects in the iron and steel industry, below are typical problems that receive most attention from the EB:

(1) if the frequencies of monitoring meters that are actu-ally used consist with those that were planned to used;

(2) if the actual emission reduction consists with the re-duction target set in PPDs;

(3) if electricity readings from power plants consist with those from the project location and from the invoices;

(4) if there is any behavior of privately modifying in-stalled capacity.

4 Development strategies for CDM project ac-tivities in the iron and steel industry

4.1 Indentifying potential projects and controlling in-vestment risk

The innovation-based modern technologies have been introduced into the iron and steel industry in China for more than 20 years. With these technologies, the level of GHG emissions in many iron and steel companies is already close to the lowest level that can be achieved today. However, there is still a large improving space for some companies. Under this context, there are two solutions that can help identify potential CDM projects in the industry and at the same time control investment risk.

(1) Developers of CDM projects should identify those advanced mitigation technologies based on project types and applicable methodologies. Any new technology and in-dustry process that can significantly reduce CO2 emissions for the iron and steel industry should be adopted to develop CDM projects. These projects that adopt advanced technol-ogies can not only improve energy efficiency but strengthen the recycling of secondary energy as well. Governments

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and iron and steel enterprises should proactively spend time and funding on indentifying them.

(2) Since the application process is long and compli-cated, more attention should be paid to those CDM proj-ects that are of obvious additionality and those that can be approved and implemented in a relatively short period of time. First, favorable environment should be created by more propaganda to help wake up the awareness of decision makers of enterprises. Cooperation should be strongly en-couraged among related research institutes and universities. A R&D platform can be set up that aims to promote CDM project development and especially to improve the develop-ment efficiency.

4.2 Controlling PDD quality with a focus on project en-vironment benefits 

Quality of PPDs decides, to a large degree, whether a CDM project can be successfully registered or not. A PDD writer should comprehensively consider the feasibility of project execution and must effectively communicate with the buyer and the DOE assessor. The amount of issued CERs in the iron and steel industry is usually large; thus, the quality requirement on PDDs is relatively stricter. PDDs should reflect the actual environmental benefits of projects.

Only those that can save energy and reduce emissions can be approved by the DNA and the DOE.

4.3 Preparing for registration risk and providing third-party certification 

Project verification is mainly conducted by DOEs. Since the headquarters of most DOEs are not located in China, it always happens that the DOE is not familiar with China’sspecific national circumstance or regulations. Under this context, third-party certification plays a crucial role. To prevent projects from being delayed, it is important to summarize lessons from past CDM projects, pre-indentify potential problems, and solve them before they are raised by the EB.

Benchmark yield of CDM projects in the iron and steel industry should be in accordance with the updated guide-lines formulated by the EB and at the same time should be based on the flexible application of industry knowledge and scientific analysis if relevant regulations are ambiguous.

4.4 Standardizing and conforming to CDM manage-ment systems

Standardizing CDM regulations is of great significance to the development of CDM projects. For example, any

Table 3 Registered CDM projects in the steel and iron industry in China

Project name CERs (tCO2e) Registration dateBOG and COG Utilization for Combined Cycle Power CDM Project in Jinan Iron and Steel Works 2 788 744 17 March 2007Waste gases utilization for CCPP in Handan Iron and Steel Group Co., Ltd 640 617 15 October 2007Baotou Iron and Steel CDQ and Waste Heat Utilization for Electricity Generation Project 152 024 8 November 2007Waste Gas Based Captive Power Plant in Liangang Group 133 349 20 December 2007Baotou Iron and Steel Blast Furnace Gas CCPP Project 2 021 994 17 March 2008Waste Heat based Captive Power Project in Hunan Hualing Liangang 51 405 29 August 2008Chongqing Iron and Steel Co. Ltd. Waste Gas to Electricity Project 438 091 7 October 2008Shanxi Taigang Stainless Steel Co., Ltd Waste Saturated Steam Recovery and Generation Project 98 255 17 November 2008Anshan Iron and Steel Group Corporation (Anshan) Blast Furnace Gas CCPP Project 2 169 936 3 December 2008Anshan Iron and Steel Group Corporation (Yingkou) Blast Furnace Gas CCPP Project 1 084 968 3 December 2008Coke Dry Quenching Waste Heat Recovery for Power Generation Project of Laiwu Iron and Steel Group Corp. 339 546 3 December 2008Ma Steel (old plant) CDQ and waste heat utilization project 170 208 4 December 2008Angang Sinter Machine Waste Heat Recovery and Generation Project 111 168 15 December 2008Shanxi Taigang Stainless Steel Co., Ltd Sinter Machine Waste Heat Recovery and Generation Project 193 362 21 December 2008Baotou Iron and Steel CDQ no. 3 and Waste Heat Utilization for Electricity Generation Project 79 752 15 January 2009Laiwu Iron and Steel Group Laigang Inc. 25MW Waste Gas Power Generation Project 168 016 16 January 2009Anshan Iron and Steel Group Corporation (Anshan) CDQ Power Generation Project 137 586 05 February 2009Anshan Iron and Steel Group Corporation (Yingkou) CDQ Power Generation Project 132 303 13 February 2009

Yinshan Profiled Iron Co., Ltd 25 MW Waste Gas Power Generation Project of Laiwu Iron and Steel Group Corp. 156 471 1 April 2009

Ma Steel (new plant) CDQ and waste heat utilization project 176 527 11 May 2009

Data source: UNFCCC (2009).

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unreported action of expanding coke production capacity during the process of CERs issuance will lead to a punish-ment ranging from deducting a portion of CERs to even rejecting the request for CERs issuance. Such tragedies can be avoided by establishing a standardizing CDM manage-ment system and conforming to them during the execution of CDM projects.

5 Conclusions

As of 14 August 2009, there have been 82 registered iron and steel CDM projects out of the total of 2174 approved by the DNA in China, dominantly mainly in the project type of energy conservation and efficiency improvement. Total annual CERs reach more than 25 million tCO2e. There are still many barriers that prevent Chinese iron and steel enter-prises from develop in a large scale CDM projects, includ-ing high investment risk, difficulty in project identification, strict requirement on PPDs, long registration waiting time, and etc. To better promote the development of CDM proj-ects in the iron and steel industry, more efforts should be made in the following aspects:

(1) Cooperation should be strongly encouraged between Chinese iron and steel enterprises, universities, research institutes and their international counterparts. The coopera-tion can help identify or develop advanced technology and industrial processes for the iron and steel industry, reduce R&D time and improve development efficiency of CDM projects.

(2) The government should spend more efforts on in-troducing the CDM to Chinese iron and steel enterprises, which could bring them with not only funding but advanced technology as well. Policies should be better formulated and publicize that can guide the healthy development of CDM projects and also encourage iron and steel enterprises to in-vest more on the innovation of energy-saving and emission-reducing technologies.

(3) High standards comparable to international ones should be set for sake of quality of CDM projects in the iron and steel industry. Training programs should be given to personnel involved in CDM projects in the industry. More importantly, CDM projects should be treated as one part of the whole production process to effectively improve the successful rate of projects.

Acknowledgement: The authors are grateful to Ms. Li Bihua of Clean-

ergy Investment Service (Beijing) Co. Ltd for her valuable contribu-

tions to the this article.

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