A new initiative aimed at promoting low-carbon steel in China’s real estate sector has been launched, co-convened by ULI Greenprint, the World Steel Association, and the China Iron and Steel Association. This collaboration unites major real estate developers and steel manufacturers to drive the transition to low-carbon steel production, with the goal of significantly reducing emissions in Mainland China and Hong Kong. China’s steel industry plays a pivotal role in global efforts to combat climate change. As the world’s largest steel producer and consumer, China, which accounted for 54 percent of global steel production in 2023, will have far-reaching implications for the global real estate industry and beyond, due to its progress in decarbonizing its steel sector.

The steel industry currently accounts for about 15 percent of China’s total carbon emissions. With the real estate sector consuming about 30 percent of China’s steel production, significant potential for impact exists. By driving demand for low-carbon steel, the real estate industry can catalyze transformative change across the entire steel value chain.

Although this initiative focuses on China, its impact will be felt globally. Improvements in steel production in China—the world’s largest steel exporter—will affect global supply chains and set new benchmarks for the industry worldwide. Moreover, the lessons learned and best practices developed through this initiative can inform similar efforts elsewhere.

For real estate professionals outside China, this initiative highlights the growing importance of considering embodied carbon in construction materials. It also underscores the power of industry collaboration in driving sustainability efforts and the potential for similar initiatives in other markets.

Progress, challenges, and opportunities

The transition to low-carbon steel production in China presents significant challenges but also opportunities for innovation and leadership in the global steel industry.

A primary challenge is the current reliance on carbon-intensive blast furnace-basic oxygen furnace (BF-BOF) technology that relies almost entirely on coal products. However, this challenge is driving technological innovation. Several of China’s largest steelmakers have invested in low-carbon technologies including Electric Arc Furnace, Direct Reduced Iron production processes, and hydrogen-based projects. Yet scaling these improvements requires substantial investment, and the industry lacks clear demand signals from such sectors as real estate for low-carbon steel.

The introduction of policies such as the EU’s Carbon Border Adjustment Mechanism has accelerated efforts to improve carbon accounting and justify green premiums for low-carbon products. Furthermore, the expected inclusion of the steel sector in China’s National Emission Trading Scheme by 2024 will also create financial pressure to accelerate plant transition. These global and local pressures, combined with growing market demand for low-carbon materials, are pushing Chinese steel companies to prioritize their low-carbon transition plans.

Tackling these challenges and unlocking the opportunities and capital require collaboration throughout the supply chain to address cost issues and to standardize procurement, carbon accounting, and disclosure processes to drive change at scale.

ULI’s unique position to drive change

As part of a global, multidisciplinary real estate organization, ULI’s Greenprint platform is uniquely positioned to lead this initiative. Its diverse membership encompasses the entire real estate value chain, including owners, developers, and investors. This broad representation allows Greenprint to:

1. Facilitate dialogue and collaboration along the entire steel supply chain for real estate
2. Provide a neutral platform for stakeholders to come together and work toward common sustainability goals
3. Leverage its global network to share best practices and lessons learned from different regions
4. Connect local actions in China with global impact, applying innovations and standards developed here in other markets

Greenprint’s ability to bring together diverse stakeholders and drive collaboration is crucial in addressing such complex challenges as decarbonizing the hard-to-abate industry.

The initiative

The Low-Carbon Steel for Real Estate Joint Statement aims to initiate a clear demand signal for low-carbon steel in China’s real estate sector. By bringing together key players from both industries, Greenprint is facilitating crucial conversations and commitments that can drive real change.

The joint statement, which can be viewed in full on Greenprint’s dedicated webpage, outlines voluntary efforts that signatories commit to, including:

• Improving disclosure and transparency of carbon emissions data from the lifecycle of steel products
• Incorporating low-carbon steel options into procurement processes for real estate projects
• Enhancing collaboration to address the cost of low-carbon steel and other challenges
• Promoting standards for low-carbon steel appropriate for global and local markets

Join the movement

If you participate in steel procurement for real estate in China as an owner, developer, or investor, and you would like to help accelerate decarbonization of the steel supply in real estate, we invite you to join this important initiative. Contact Jenny Zhang at ULI Asia Pacific to learn more about becoming a signatory to the joint statement and participating in future collaborations.