Dynamic Allocation of Carbon Quotas in China’s Steel Industry: Perspectives on Energy Transition Contributions, LCA, and Regional Heterogeneity

Abstract

To address carbon cost pressures from the CBAM and fluctuation in China’s domestic carbon-pricing mechanism, it is crucial to design a carbon quota allocation scheme for China’s steel industry that balances total quantity control and structural optimization. This study comprehensively considers the industry’s LCA and regional heterogeneity, introduces indicators related to “energy transformation contribution”, and employs the maximum deviation method and harmony allocation model to calculate and evaluate provincial quotas and their performance. Results show that: (1) Under the national total quantity control strategy, China’s steel industry carbon quota will be reduced to 1770 Mt by 2030; (2) Calculated via the maximum deviation method, the energy transformation contribution index accounts for 18.95% of the total contribution of all factors, while the LCA index accounts for 46.61%; (3) The maximum inter-provincial difference in carbon quotas reaches 175 Mt, reflecting significant heterogeneity in ecological carrying capacity, resource-allocation efficiency, and emission-reduction potential across regions. This study provides a scientific basis for optimizing China’s unified carbon-market mechanism and guiding the steel industry’s energy transition, and offers a reference for developing countries to address international carbon barriers through regionally differentiated strategies.