I. High-level policy support intensifies; short-process steelmaking emerges as a core pathway for green transformation
In May 2026, the Ministry of Industry and Information Technology issued the revised *Implementation Measures for Capacity Replacement in the Iron and Steel Industry*. These measures further tightened capacity replacement requirements, mandating a replacement ratio of no less than 1.5:1 for both national ironmaking and steelmaking capacities. Simultaneously, the policy explicitly supports the one-for-one replacement of basic oxygen furnaces (BOFs) with electric arc furnaces (EAFs), guiding the structural adjustment of steel capacity toward short-process and low-carbon operations.
Meanwhile, the *15th Five-Year Plan for Green and Low-Carbon Industrial Development* identifies EAF-based short-process steelmaking as a key area for transformation. It proposes prioritizing the allocation of scrap steel and green electricity resources to enterprises utilizing this process and sets specific targets: annual scrap steel recycling volume exceeding 300 million tons and a comprehensive utilization rate of bulk industrial solid waste reaching 62% by 2030. Data from the China Iron and Steel Association indicates that during the "15th Five-Year Plan" period, short-process steelmaking will enter a critical phase of large-scale, high-quality development, bolstered by policies covering recycled material application, green finance support, and carbon emission constraints.
Furthermore, the national standard *Technical Specifications for Near-Zero Carbon Electric Arc Furnace Steelmaking* has entered the public consultation phase. This standard will establish unified regulations regarding carbon emission controls, technical requirements, and evaluation methods for new and retrofitted EAFs, providing a standardized foundation for the industry's near-zero carbon development.
II. Market scale expands steadily; share of EAF steel continues to rise
As a core process route for carbon reduction in the steel industry, EAF-based short-process steelmaking utilizes scrap steel as its primary raw material. It eliminates high-energy-consuming and high-emission stages-such as coking, sintering, and blast furnace ironmaking-resulting in carbon emissions of only about 0.4 tons per ton of steel. This figure is merely 20% of the emissions associated with the traditional blast furnace-basic oxygen furnace (BF-BOF) long-process route, demonstrating a significant advantage in carbon reduction. In terms of industry scale, China's electric arc furnace (EAF) steel output in 2025 is approximately 168 million tonnes, accounting for 12.8% of the national total crude steel production-an increase of 1.5 percentage points from 2024. The industry growth rate is projected to remain above 6% in 2026, with the share of EAF steel output expected to surpass 15%, corresponding to a market size exceeding RMB 57 billion. By the end of 2025, 89 EAF steel plants nationwide had obtained ISO 14067 product carbon footprint certification, covering an output of over 120 million tonnes, reflecting the steadily rising market acceptance of green steel.
Regarding production capacity, the deployment of large-tonnage, ultra-high-power electric arc furnaces is accelerating domestically. Projects such as the 260-tonne EAF at Guangxi Shenglong Metallurgy and the 180-tonne Quantum EAF at Shanxi Jianlong have successively commenced production; the maximum annual capacity of a single furnace reaches 2.2 million tonnes, and 180-tonne class furnaces have become the mainstream equipment for domestic short-process steel plants. Simultaneously, the proportion of integrated shaft furnace and EAF projects is rising, while supporting technologies-such as scrap preheating, waste heat recovery, and green electricity utilization-are becoming increasingly widespread, driving the industry's transition from "capacity expansion" to "quality improvement."
III. Breakthroughs in Multiple Areas of Technological Innovation; Synergistic Upgrading of Intelligence and Low-Carbon Capabilities
China's EAF technology has evolved from simple equipment upgrades to comprehensive, process-wide innovation characterized by "green, intelligent, and digital" features.
In the field of low-carbon smelting, domestic enterprises have achieved large-scale application of smelting processes utilizing 100% scrap steel and green electricity. At Baowu Group's Zhanjiang base, the CO₂ emission intensity per tonne of steel for the EAF production line has dropped to 0.42 tonnes-75% lower than the industry average. Leveraging local wind and solar resources, Sichuan Yekong Group has established a "green electricity–scrap steel" circular production model, with its EAF capacity accounting for 90% of the provincial total. Some enterprises have also installed flue gas CO₂ capture and purification units with annual capture capacities reaching 120,000 tonnes, further reducing carbon emissions across the entire production process. Regarding intelligent upgrades, China has developed mature intelligent steelmaking model systems for electric arc furnaces (EAFs). These systems encompass core modules such as process monitoring, dynamic energy input, oxygen blowing and carbon injection, and endpoint prediction, enabling precise control over four key indicators: temperature, endpoint carbon content, endpoint phosphorus content, and smelting duration. Through the integrated application of technologies such as digital twins, intelligent electrode regulation, and continuous scrap preheating, advanced domestic EAFs have achieved a comprehensive electricity consumption of less than 300 kWh per ton of steel and electrode consumption below 0.9 kg per ton of steel. Smelting cycles have been reduced to under 40 minutes, resulting in significant improvements in production efficiency and product precision.
In the equipment manufacturing sector, domestically produced EAF equipment has transitioned from a "follower" role to achieving independent innovation. A green, high-efficiency EAF developed by the Xi'an Electric Furnace Research Institute boasts an energy conversion efficiency of 97%, filling multiple gaps in domestic technology. Additionally, a 120-ton ultra-high-power EAF-jointly built by Baogang Group and the China National Heavy Machinery Research Institute-was successfully exported, marking the continued growth of the international competitiveness of large-tonnage domestic metallurgical equipment. Meanwhile, technologies in specialized segments such as DC arc furnaces, shaft-furnace preheating EAFs, and submerged arc furnaces continue to evolve, catering to diverse applications including steelmaking, solid waste treatment, specialty alloy smelting, and the comprehensive utilization of mineral resources.
IV. Significant Industrial Results: Accelerating Regional Transformation and Enterprise Upgrading
Driven by both policy and technology, steel enterprises across China have successfully transitioned from long-process (blast furnace-converter) to short-process (electric arc furnace) production, achieving remarkable results in green manufacturing.
Xinhui Metallurgy, a subsidiary of Hebei Xinwu'an Iron & Steel Group, became the first private steel enterprise in Hebei Province to complete this transformation. By adopting an all-scrap smelting process and eliminating high-pollution stages such as sintering and blast furnace operations, the company reduced its CO2 emissions from 1.857 tons to 0.6 tons per ton of steel. It also achieved emission reduction rates of 86% for particulate matter, 90% for sulfur dioxide, and 87% for nitrogen oxides, earning an "A-level" rating for environmental performance among Hebei steel enterprises. In Southwest China, leveraging abundant renewable energy resources, regions such as Sichuan and Yunnan are accelerating the establishment of "green power + electric furnace" short-process production bases. By utilizing clean energy sources like wind and solar power, these bases further reduce carbon emissions in steelmaking and foster green steel industrial clusters with distinct regional characteristics.
Furthermore, the application scope of electric arc furnace (EAF) technology continues to expand. Beyond traditional steelmaking, multifunctional direct-current (DC) electric arc furnaces are now widely used in hazardous waste disposal, the recovery of rare and precious metals, and the resource utilization of smelting slag. These furnaces enable the efficient processing of materials such as calcium aluminate slag, ferrochrome slag, and precious metal-bearing waste; they ensure environmental compliance while generating value through resource recovery, thereby serving as core equipment for the circular utilization of industrial solid waste.
V. Industry Outlook: From Low-Carbon Alternative to Zero-Carbon Leader
Overall, China's electric arc furnace industry has entered a stage of high-quality development driven by the synergy of policy and technological innovation. In the short term, new regulations on capacity replacement will accelerate industry consolidation, concentrating high-quality capacity among enterprises that possess advantages in scrap steel resources, green power access, and technical capabilities. In the medium to long term, driven by continuous breakthroughs in technologies such as hydrogen metallurgy, near-zero-carbon electric arc furnaces, and intelligent steelmaking, EAF-based steel production will evolve from a "low-carbon alternative" into a core pathway for achieving zero-carbon development in the steel industry.
For the global market, China's mature EAF equipment manufacturing capabilities, comprehensive process solutions, and large-scale green steel production capacity offer a cost-effective "Chinese solution" for the low-carbon transformation of the global steel industry. Looking ahead, there will be expanding opportunities for industrial cooperation between China and the rest of the world in areas such as EAF equipment exports, green steel trade, and low-carbon technology collaboration.