Decomposition analysis, decoupling status, and future trends of energy consumption in China's iron and steel industry

Probing the determinants of energy conservation and decoupling energy use from economic growth in the iron and steel (IS) industry are at the forefront of China's environmental concerns. This study first constructed an extended logarithmic mean divisia index model to estimate determinants of the IS industrial energy consumption. The Tapio approach and decomposed decoupling analysis is further utilized to analyze the decoupling relationship between the industry's total energy use and its value creation as well as the decoupling states of the determinants. Finally, grey Verhulst technique is employed to predict the future trend of decoupling state. Empirical results based on statistical data of the IS industry during 2006-2017 demonstrate that: (1) Regulatory effect and scale effect contribute to energy conservation. Growth effect significantly increases energy consumption while technological effect and structural effect exert unstable impacts on energy use. (2) Weak decoupling states between energy use and value creation are mainly observed during the research period. Structural, technological, regulatory, and scale effects are mainly weak decoupling, while the growth effect is mainly expansionary negative decoupling. (3) A weak decoupling state between the two variables is predicted up to 2030 with the help of grey theory.