Carbon Reduction in Steel Enterprises Under Carbon–Energy-Material Market Coupling: A System Dynamics Approach

Amid growing concerns over carbon emissions from the steel industry, China, the world’s largest steel producer, formally incorporated the steel sector into its national carbon emissions trading system (ETS) in March 2025. This study uses actual and projected data to calculate China’s steel industry carbon emissions (2021–2030) and explore its carbon reduction benefits under the carbon market. This study employs a system dynamics approach to innovatively construct a five-party coupled model, thus overcoming the limitations of single-perspective analysis and mitigating the waterbed effect in emissions reduction. Simulation results indicate: (1) The carbon market mechanism exerts a significant leverage effect on carbon prices, serving as the core signal driving industrial low-carbon transformation; (2) discrepancies in carbon emission reduction capabilities among enterprises will intensify structural adjustments, with the increase in the proportion of short-process steelmaking relying on dual drivers of policy guidance and technological innovation; and (3) demand-side emission reduction is the most effective pathway to achieve “dual carbon” goals, as it directly suppresses excess production and aligns with sustainable consumption patterns. This study provides China’s steel industry with carbon reduction options under the carbon market, aids the Chinese government’s carbon reduction strategy formulation, and offers insights for global carbon management.