How a Water Utility Group Achieves Cost Reduction and Efficiency Enhancement Through Carbon Emission Monitoring

Introduction: Carbon Emission Monitoring Transitions from Annual Accounting to Online Governance

Against the backdrop of accelerating the inclusion of high energy-consuming industries such as steel, power, and building materials into the national carbon emission trading system, carbon emission monitoring is shifting from "year-end final accounting" to "real-time process management." For long-process steel enterprises, greenhouse gas emissions originate not only from coal and gas combustion but also from multiple links such as limestone decomposition, by-product gas venting, purchased electricity, and raw fuel transportation. A single ledger-based statistical approach can no longer meet the requirements for compliance, verification, and supply chain disclosure.

A large integrated steel enterprise in East China produces 7.2 million tons of hot metal, 6.8 million tons of crude steel, and 6.5 million tons of steel products annually, possessing complete processes including coking, sintering, ironmaking, steelmaking, rolling, and a captive power plant. Before the project launch, the enterprise's annual greenhouse gas emissions were approximately 13.464 million tons of CO2 equivalent, with a crude steel carbon emission intensity of about 1.98 tons CO2e/ton of crude steel. Carbon emission data relied mainly on manual consolidation and monthly accounting, making it difficult to support refined energy conservation, carbon reduction, and downstream customer carbon footprint verification.

In July 2023, the enterprise launched an integrated project for online carbon emission monitoring and carbon accounting, with Yicai Technology participating as the technical service provider for the construction of the carbon data platform, online monitoring integration, and carbon footprint model. The project covers Scope 1 direct emissions and Scope 2 purchased electricity emissions, and extends to certain Scope 3 emissions from raw fuel transportation and the carbon footprint of purchased raw materials. After 18 months of construction, the enterprise established a unified carbon emission management system based on online monitoring, energy metering, laboratory testing data, and carbon accounting models.

This case provides a replicable engineering sample for high-emission industries to carry out carbon monitoring, carbon accounting, and carbon footprint management.

Project Background: Carbon Management Upgrade Under Multiple Compliance and Operational Pressures

The enterprise is a regional key energy-consuming unit and a carbon emission trading entity. Its main production systems include 4 sintering machines, 2 coke ovens, 3 blast furnaces, 3 converters, 2 lime kilns, 2 hot rolling production lines, 1 cold rolling production line, as well as 2 350 MW captive coal-fired units and multiple gas boilers. Long production processes, numerous energy media, and dispersed emission sources constitute the primary practical challenges faced by the project.

On the supply chain end, the enterprise's downstream customers involve automotive steel, home appliance steel, and engineering machinery steel. An increasing number of customers are beginning to require product carbon footprint reports. Some export orders also need to meet the emission declaration requirements related to the EU Carbon Border Adjustment Mechanism. Customers not only require enterprise-level annual emission data but also demand carbon footprints for hot-rolled coils, cold-rolled coils, and other products provided by heat number, steel grade, and specification, along with explanations of system boundaries, emission factors, and data sources.

Before the project launch, carbon emission data was scattered across 17 business systems and over 200 reports. Inconsistent data calibers, delayed anomaly detection, and difficulties in tracing emission sources became the main bottlenecks restricting the upgrade of carbon management.

Technical Challenges: Unifying Multi-source, Heterogeneous, and Dynamic Data

The project faced six distinct categories of technical difficulty that required innovative solutions:

Solutions: Building an Integrated Platform

To address these difficulties, the project adopted an overall scheme of "online monitoring as the foundation, energy metering as the skeleton, laboratory data for correction, carbon accounting model as the core, and carbon footprint application as the output." The platform integrates about 12,000 measurement points and processes approximately 2.1 million data entries daily.

In data quality control, the platform set over 120 anomaly rules, automatically triggering alerts for issues like CEMS drift or metering mismatches. All raw data and correction records retain audit logs for third-party verification.

Implementation Process: From Inventory to Calibration

During implementation, dynamic adjustments were made. For instance, moving average algorithms were introduced to handle spikes in converter gas recovery data, and humidity compensation rules were added for belt scales during rainy seasons. This demonstrates that carbon monitoring is a systematic reconstruction of metering, process, and management procedures.

Final Results: Data Quality, Emission Reduction, and Economic Benefits

Economic Impact: The project drove an annual comprehensive energy cost reduction of approximately 126 million RMB. Key contributors included reduced gas venting/waste heat generation (~68M RMB), coal blending optimization (~39M RMB), and electricity optimization (~19M RMB). With an investment of ~118 million RMB for the platform, the static payback period is estimated at 3.6 years.

Product Carbon Footprint: Hot-rolled coil carbon footprint decreased from 2.38 to 2.26 kg CO2e/kg; cold-rolled coil from 2.61 to 2.49 kg CO2e/kg. The platform shortened carbon data declaration cycles for exported products from 15 days to 3 days, facilitating compliance with EU CBAM and customer audits.

Industry Insights and Outlook

This case illustrates that the core of carbon emission monitoring is not just installing equipment, but establishing a unified management system covering emission sources, energy flows, material flows, and data flows. Online monitoring improves real-time performance for key sources but cannot completely replace emission factor and material balance methods. For industries with complex processes like steel, the fusion of multiple methods and cross-validation is more engineeringly feasible.

Looking ahead, as technologies such as electric arc furnace short processes, hydrogen metallurgy, and carbon capture are applied, carbon emission monitoring models will need to continuously update their boundaries and methodologies. For high-emission industries, this shift from "post-event statistics" to "process control" provides a solid data foundation for the industry's low-carbon transition.