Globally, what models or strategies have small and medium manufacturing enterprises in the steel and cement industries adopted to reduce emissions and participate in the carbon credit market?

Recently, many small and medium manufacturing enterprises (SMEs) in the steel and cement sectors, which are high-emission industries, have gradually implemented solutions to reduce greenhouse gases and access the carbon credit market. Common measures include: (1) improving energy efficiency, (2) switching to alternative fuels, (3) changing production processes, and (4) investing in emissions reduction technology136

For example, medium-sized cement enterprises in India have adopted the installation of waste heat recovery systems to utilize surplus heat during the production process. Additionally, they partially replace clinker with industrial additives such as fly ash or blast furnace slag. These solutions both help reduce fuel consumption and cut down the amount of CO₂ generated during the clinker firing process, which is the main source of emissions in the cement industry. Some companies have registered these projects under the Clean Development Mechanism (CDM) of the Kyoto Protocol to generate carbon credits. According to a report by the Economic Times, even since 2007, many Indian enterprises have generated a large volume of carbon credits by utilizing fly ash and installing waste heat recovery systems.137

In the steel industry, SME businesses have modernized furnaces, installed energy-efficient motors, improved production lines, and implemented waste heat recovery for power generation. A medium-sized steel plant in Gujarat state (India) installed a 25 MW power generation unit utilizing waste heat, helping to save electricity derived from coal and reducing nearly 160,000 tons of CO₂ annually, while also receiving certified emission credits.138

In addition to on-site solutions, many SME businesses are exploring new technologies such as Carbon Capture and Storage (CCUS), despite the high cost, to prepare for the long-term transition phase. Some pioneering businesses have participated in demonstration projects or trials of new technologies, and utilized the voluntary carbon credit market to mobilize finance for these initiatives. The Climate Action Reserve organization has developed a specific standard set for low-carbon cement, aiming to encourage businesses to innovate cement types with low clinker content, thereby reducing emissions and earning carbon credits for technological innovation.139

In the steel industry, new production methods, such as using green hydrogen combined with electric arc furnaces, are gradually emerging. Some international policy proposals allow steel companies to receive carbon credits if they reduce their emission intensity compared to the industry average (based on traditional blast furnace technology).

In countries with emission trading systems (ETS) such as the EU, South Korea, or China, some SME businesses in the steel and cement industries have had to participate in the ETS and buy and sell emission allowances, or improve technology to avoid exceeding emission thresholds. Even when not directly regulated, smaller supplier businesses must also reduce emissions to maintain competitiveness within the value chain. Finally, many SMEs also use voluntary carbon credits to offset unavoidable emissions, by investing in afforestation or renewable energy projects, thereby enhancing their “green” image with customers and investors.

In summary, through measures such as energy saving, production process innovation, material substitution, and leveraging carbon technology, small and medium-sized enterprises in the global steel and cement industries have begun reducing emissions. By registering these initiatives under standards like CDM, Verra, Gold Standard, or national mechanisms, many businesses have turned emission reductions into actual revenue streams, while gradually integrating into the global carbon credit market, preparing for the future trend of carbon neutrality.

References

136. Carey, K., & Primo, A. (2022). A Concrete Path to Decarbonizing Cement. Climeco. https://www.climeco.com/insights-library/a-concrete-path-to-decarbonizing-cement/
137. Choudhary, S. (2007). Cement cos cut costs, earn carbon credits with fly ash. The Economic Times. https://economictimes.indiatimes.com/industry/indl-goods/svs/cement/cement-cos-cut-costs-earn-carbon-credits-with-fly-ash/articleshow/2152503.cms?from=mdr
138. United Nations Framework Convention on Climate Change. (2019). Waste Heat Recovery CDM CPP. United Nations Carbon Offset Platform. https://offset.climateneutralnow.org/waste-heat-recovery-cdm-cpp
139. Carey, K., & Primo, A. (2022). A Concrete Path to Decarbonizing Cement. Climeco. https://www.climeco.com/insights-library/a-concrete-path-to-decarbonizing-cement/