China’s Steel Capacity Replacement Policy, initiated in 2013, has undergone multiple revisions to address overcapacity and promote sustainable steel production. In 2013, the policy prohibited new capacity additions and set a target to eliminate 15 million tons of iron-making and steelmaking capacity by 2015. By 2015, a 1.25:1 capacity replacement ratio was introduced for environmentally sensitive areas. In 2016, the goal expanded to reduce crude steel capacity by 100-150 million tons over five years, emphasizing mergers, legal phase-outs, and financial incentives.
The 2017 measures reinforced the 1.25:1 replacement ratio and introduced equivalent replacement for transitions from BOF to EAF. In 2020, the policy was suspended for revision, focusing on strengthening supervision. The 2021 update raised the replacement ratio to 1.5:1 in key areas and included EAF and hydrogen metallurgy in capacity calculations. The 2025–2026 Work Plan targets 15% EAF production by 2025 and maintains the 1.5:1 replacement ratio, emphasizing cleaner production and carbon reduction.