Upon the implementation of the European Union Carbon Border Adjustment Mechanism (CBAM), substantial challenges are anticipated to impact the international trade of Chinese steel products. To safeguard the competitiveness of Chinese steel products on the global stage, this paper establishes a tripartite evolutionary game model, involving large steel enterprises, small- and medium-sized steel enterprises, and the government. The model integrates collaborative emission reduction and free-riding benefits among enterprises, along with the government’s dynamic subsidies and penalties. First, we calculate the replicator dynamic equations and conduct stability analysis to obtain the evolutionary trends and system equilibrium points in different phases of the CBAM. Then, we validate the evolutionary theoretical analysis of the model through example simulation analysis. Finally, we explore the impact of different parameters on the agents through a sensitivity analysis of parameters. The findings indicate that (1) large enterprises demonstrate greater sensitivity to CBAM, making their production structures more susceptible to changes in CBAM policies; (2) small- and medium-sized enterprises are more prone to free-riding behavior influence; (3) government intervention should be kept within appropriate boundaries, as excessive intervention may lead to strategic oscillation, with passive management being chosen by the government during the strengthening phase of CBAM; (4) elevating the price in the Chinese carbon market would slow down the structural changes in the production of Chinese steel enterprises, serving as an effective measure to counteract the impacts of CBAM. This paper provides theoretical support for how steel enterprises and the government can respond to CBAM, aiding stakeholders in selecting optimal strategies during different implementation stages and mitigating the impacts of the CBAM to the maximum extent possible.

The green and low-carbon transformation of the iron and steel industry stands as a pivotal cornerstone in the development of China. It is an inevitable trajectory guiding the future of industry. This study examined the energy consumption and carbon emission trends in the iron and steel industry. Variations under different scenarios were analyzed while emphasizing production control, changes in production structure and energy efficiency improvement. The analysis integrated the extreme energy efficiency model. This study proposed methods to enhance energy efficiency in the iron and steel industry. The costs of energy efficiency improvement and production structure changes were assessed using marginal energy saving and abatement cost curves. The findings showed that the carbon emission reduction contribution of crude steel production decline is the highest, while energy efficiency improvement technology offers the smallest, whose contribution, however, is substantial and cannot be overlooked by 2030. Energy efficiency improvement in the Chinese iron and steel industry results in an average unit energy saving and abatement cost of 27.0 yuan. It results in a total abatement cost of 21.02 billion yuan and a potential abatement of 780 Mt. Considering abatement potential, altering production structure offers significantly higher cumulative abatement compared to energy efficiency improvement technology. This is because the per unit abatement cost of production structure change is 702.7 yuan. However, this high cost poses a challenge to widespread adoption. The integration of the iron and steel industry into the carbon trading system necessitates reinforcing market constraints and expediting process adjustments. These steps are crucial to achieving the green and low-carbon transformation of the industry.

Upon the implementation of the European Union Carbon Border Adjustment Mechanism (CBAM), substantial challenges are anticipated to impact the international trade of Chinese steel products. To safeguard the competitiveness of Chinese steel products on the global stage, this paper establishes a tripartite evolutionary game model, involving large steel enterprises, small and medium-sized steel enterprises, and the government. The model integrates collaborative emission reduction and free-riding benefits among enterprises, along with the government's dynamic subsidies and penalties. The paper analyzes the evolutionary trends and stable states of the three parties during different stages of CBAM, including a sensitivity analysis of key parameters. The findings indicate that large enterprises demonstrate a heightened sensitivity to CBAM, while small and medium-sized enterprises are more significantly influenced by free-riding benefits. Government intervention should be strategically timed and incline towards passive management during the strengthening phase of CBAM. Additionally, the refinement of the Chinese carbon market emerges as an effective means to counter CBAM. This paper provides theoretical support for how steel enterprises and the government can respond to CBAM, aiding stakeholders in selecting optimal strategies during different implementation stages and mitigating the impacts of CBAM to the maximum extent possible.