Promoting energy conservation in China's iron & steel sector

The iron & steel industry is one of the major energy-intensive sectors in China. In this paper, we define the variable of energy intensity to analyze the energy conservation potential in China's iron & steel sector using the co-integration method and scenario analysis. We find that there is a long-term relationship between energy intensity and factors such as R&D intensity, labor productivity, enterprise scale, and energy price. Monte Carlo simulation technique is further used to address uncertainty problem. The results show that under baseline scenario, the energy intensity of China's iron & steel sector will reach 17.09 tons of coal equivalents per 10,000 Yuan (Tce/10,000Yuan) in 2020. The energy saving potential in 2020 will be 344.05 Mtce (million tons of coal equivalents) and 579.43 Mtce under moderate energy-saving scenario and advanced energy-saving scenario respectively. Finally, based on the results of the elasticity coefficients of the long-term equation, we propose future policy for promoting energy conservation in China's iron & steel industry.