The sky is clear and bright, with white clouds drifting leisurely and the cheerful chirping of birdsong heard in the trees. On this crisp winter day, hard work meets success. Over the past year, Shougang Group has thoroughly studied and implemented Xi Jinping Thought on Ecological Civilization, advancing green transformation through its "one leadership, two integrations" strategy. The Group has consciously integrated the concept of green and low-carbon thinking into its decisions, operations, and culture, fueling a wave of "green momentum" that is redefining high-quality eco-first growth.

■ Technology Leadership: Driving Innovation for a Greener Future

Clean production, green factories, a circular economy, energy-saving upgrades... Shougang puts technology at the heart of green development. Guided by its "Eight Focus Areas" operational policy, the Group has leveraged technological innovation to build a competitive edge in environmental protection. By deeply integrating technological innovation with green development, the Group has reinforced the green foundation of its high-quality growth.

In 2024, Beijing Shougang and Shougang Jingtang intensified their efforts to achieve breakthroughs in low-carbon steelmaking. They increased blast furnace ratios and oxygen enrichment. They advanced the use of high scrap ratios in converter steelmaking, with Beijing Shougang conducting 12 trial heats of low-carbon steel production using a scrap ratio of up to 50%. At the same time, Shougang Jingtang achieved a seven-heat continuous casting run of IF steel for automotive sheets with a 50% scrap ratio. In-depth energy-saving initiatives at production interfaces led to record-low temperature drops in molten iron at both Beijing Shougang and Shougang Jingtang. The Group is also developing a low-carbon steelmaking process with Shougang's unique characteristics. Projects such as Beijing Shougang's near-zero carbon emission high-quality steel project and Shougang Jingtang's low-carbon ironmaking furnace R&D are progressing steadily, setting the foundation for future green steelmaking.

Innovation is an attitude, but more importantly, it is an action. Over the past year, the Group's Safety and Environmental Protection Department led energy-saving technology exchange meetings, implemented annual low-carbon work plans, and initiated extreme energy efficiency initiatives and energy cost control programs. As a result, the energy efficiency levels of key processes in major subsidiaries have steadily improved. Beijing Shougang's No. 8 sintering machine and Shougang Jingtang's No. 2 sintering machine were both honored as "Champion Furnaces" in the 2023 National Energy Conservation and Consumption Reduction Benchmarking Competition for Key Large-Scale Steel Production Equipment. Shougang Jingtang has also launched a comprehensive sintering injection system, integrating multiple technologies, including "waste flue gas co-injection with natural gas, internal flue gas recirculation, external flue gas recirculation, and humidified injection." This accomplishment has earned it the title of "Industry Leader in Process Energy Efficiency" from the Ministry of Industry and Information Technology. Both Shougang Jingtang and Beijing Shougang have strived to become industry benchmarks, being recognized as "Dual-Carbon Best Practice Energy Efficiency Benchmark Demonstration Enterprises" in the steel industry.

Achieving higher output with lower carbon consumption has enhanced the low-carbon competitiveness of the Group's green products. In 2024, focusing on high-end products and supply chain decarbonization, Shougang collaborated with the world-renowned metallurgical equipment supplier Danieli to launch a near-zero-carbon-emission, high-quality steel project. The company has expanded its green product line, including high-strength, lightweight materials, long-life, high-corrosion-resistant steels, and electrical steels. Beijing Shougang exceeded production targets for non-oriented electrical steel for new energy drive motors and grain-oriented silicon steel, while Shougang Jingtang surpassed its goals in lightweight and high-corrosion-resistant products.

Focusing on the green industrial landscape cultivated and deployed by the Group, each sector has demonstrated vibrant momentum. In 2024, sales of high-end green materials such as Beiye's magnetic sensor materials for photovoltaic (PV) new energy modules and Gitane's heat-treated crystalline silicon materials for PV power generation increased annually, expanding eco-friendly material supply. Shougang Environment's food waste resource utilization project was also added to Beijing's key construction plan.

In 2024, Shougang Construction upheld the concept of green building, initiating six prefab building R&D projects, achieving a cumulative settlement revenue of 616 million yuan in this sector, and completing over 200,000 square meters of prefabricated building area. Meanwhile, Shougang Real Estate, guided by its philosophy of "Building with Care, Creating a Green Future," actively explored new energy-saving and environmentally friendly technologies. It delivered 410,000 square meters of green buildings, with two ongoing projects earning two-star green building certification from China's Ministry of Housing and Urban-Rural Development and other relevant authorities.

With the advancement of emerging technologies in biomanufacturing and carbon capture, utilization, and storage (CCUS), Shougang Lanzatech has embraced a new growth opportunity. In 2024, the world's first 10,000-ton-scale demonstration project - converting CO₂-rich steel off-gas into ethanol and feed protein. Leveraging its "Strain Research – Pilot Scale-up – Industrial Application – Commercialization" innovation system, the project utilizes Shougang Lanzatech's proprietary continuous gas fermentation technology. Using CO₂-containing coke oven and converter gas from Shougang Jingtang as feedstock, the process involves gas pretreatment, fermentation, distillation, and dehydration to produce anhydrous ethanol and novel feed protein. The project earned a spot in the National Development and Reform Commission's "List of Green and Low-Carbon Advanced Technology Demonstration Projects (First Batch)." Producing 1 ton of ethanol directly consumes approximately 0.5 tons of CO2, which aligns with China's "dual carbon" strategic development direction. With potential applications in steel, coking, petroleum refining, and other industries, it sets a strong precedent for green, low-carbon, and circular economic development in the industrial sector.

Across the Group and beyond, Shougang is advancing with a carbon reduction-first strategy, driving improvements in pollution and emission reduction while fostering growth in industrial operations and social benefits. With unwavering commitment, we are empowering new quality productive forces by making green productivity a core strength.

■ Efficient Management: Advancing with Green Commitment

Shougang is steadfastly progressing along the path of green development. In 2024, the Group deepened its commitment to China's "dual-carbon" strategy, formulated a "dual-carbon" action plan, and embedded eco-consciousness into every department. By rigorously enforcing the pollutant discharge permit system, Shougang prioritized emission reduction and pollution control as its strategic focus. Through the continuous implementation of the "Shougang Group Green Action Plan," the Group has embedded ecological consciousness into every aspect of its business operations, striving to build a resource-efficient and environmentally friendly enterprise.

Green initiatives lay a solid foundation for development. Over the past year, Shougang Group's subsidiaries have applied the Green Action Plan in a manner tailored to their specific conditions. Beijing Shougang and Shougang Jingtang maintained Grade A environmental ratings by aligning with the Hebei Province Key Industries Environmental Performance Grade A Standards (Trial). They further improved governance measures, advancing projects such as blast stove optimization at Qian'an Iron & Steel and rolling mill dust removal at Shougang Jingtang's rolling mills, continuously enhancing environmental efficiency. Changzhi Iron & Steel continued to deepen its pollution control efforts, advancing projects such as the upgraded denitrification of coke oven flue gas, earning an upgrade to Grade A environmental status. Tonghua Iron & Steel and Shuicheng Iron & Steel focused on addressing existing challenges while accelerating the implementation of ultra-low emission upgrades to meet deadlines. Key projects included the desulfurization and denitrification of boilers at Tonghua Iron & Steel, as well as the addition of denitrification systems for sintering machine flue gas at Shuicheng Iron & Steel. The Group organized expert teams to support Tonghua Iron & Steel, Shuicheng Iron & Steel, and Guiyang Special Steel in their efforts to achieve ultra-low emissions. By analyzing technical challenges in relation to national policies and local government requirements, the teams provided practical transformation recommendations and monitoring and evaluation guidance, with monthly progress reviews to ensure stable advancement.

This institutional framework has been enhanced to strengthen management capabilities. The Group also improved its reporting and emergency systems, with Beijing Shougang, Shougang Jingtang, Changzhi Iron & Steel, Shuicheng Iron & Steel, Tonghua Iron & Steel, and Guiyang Special Steel completing and releasing their 2023 Environmental Responsibility Reports. Adhering to the principle of ultra-low-cost operations, the Group's Safety and Environmental Protection Department formulated the 2024 Environmental Cost Control Plan for core steel production units, defining objectives and tasks while researching cost-reduction measures. Additionally, subsidiaries such as Beijing Shougang, Shougang Jingtang, and Shuicheng Iron & Steel continued refining their professional management systems. Core steel production units and key non-steel entities strengthened their emergency response systems, completing the revision and filing of contingency plans. Key units, such as Shougang Cold Rolling and Shougang Industrial Group, conducted emergency drills. At the same time, Shougang Jingtang, Changzhi Iron & Steel, and Guiyang Special Steel enhanced their radiation safety management, achieving 100% training coverage for relevant personnel.

Commitment has been enhanced to fulfill safeguarding missions. In 2024, the Group adopted a "Field Investigation without Notice and Report" approach to conduct surprise field inspections at Shougang Environment, Shougang Cold Rolling, Beiye, Shoujian Construction, and other subsidiaries, ensuring compliance with environmental and safety management policies. Executives across all units also led multi-level inspections and rectified potential hazards using similar methods. A cross-regional, coordinated safeguarding mechanism was activated to ensure environmental quality during major events, critical periods, and periods of heavy pollution. To meet safeguarding requirements for holidays, the China International Fair for Trade in Services (CIFTIS), and other key events, the Group refined its plans, conducted on-site inspections, and implemented dynamic scheduling to enforce protective measures effectively. Additionally, it strengthened its collaborative management mechanisms and coordinated production maintenance with efforts to reduce pollutants.

Ultra-low emissions temper the quality of development. In 2024, Shougang Group improved its green development capabilities across all subsidiaries, achieving full coverage of pollutant discharge permit management. By implementing layered, dynamic controls to optimize operations, the Group leveraged the efficient, centralized, and precise advantages of the "single-permit" regulatory model. This not only led to comprehensive upgrades in pollution control equipment and technologies but also significantly improved environmental management capabilities, governance efficiency, and compliance standards. Subsidiaries such as Beijing Shougang, Shougang Jingtang, Changzhi Iron & Steel, Guiyang Special Steel, and Gitane - national-level green factories - have advanced energy conservation and reduced carbon emissions at the source. Through its project for the comprehensive utilization of solid waste resources, Beijing Shougang transformed solid wastes, including blast furnace slag, converter steel slag, desulfurization ash, and refining slag, into high-value-added new green building materials. This has facilitated deep coordination of industrial chains and led to the recycling of bulk metallurgical solid waste resources, with a notable demonstration effect in the industry. Shougang Jingtang stabilized over 55% pellet-based ironmaking, improving clean production at the source and emerging as a new model of green and low-carbon steelmaking. In the 2024 EcoVadis (the world's largest corporate social responsibility rating agency) sustainability certification ratings, Shougang Jingtang earned the EcoVadis "Silver Medal" certification badge, placing it in the top 8% of 140,000+ companies worldwide. It also topped China's L-scale (L-type) enterprises steel industry ranking and was selected for multiple "Zero-Waste" and digital excellence awards. Both Qian'an Iron & Steel and Shougang Jingtang were recognized as 2023 Hebei Province Steel Industry Digital Transformation Excellence Enterprises. Shougang Jingtang was honored as a Green Development Excellence Enterprise and was also selected as a model case for the "Zero-Waste Enterprise" initiative by the Ministry of Industry and Information Technology.

Ecological restoration rejuvenates mining areas with a new look. By faithfully fulfilling its social responsibility for ecological and environmental protection, Shougang has intensified efforts to build green mines and vigorously advanced the ecological restoration of mining areas. Over the past year, subsidiaries such as Tonghua Iron & Steel, Shougang Mining Corporation, Shougang Holding, Shougang Mining Investment, and Shuicheng Iron & Steel implemented the annual mine ecological restoration plan in accordance with the Group's unified deployment and local government requirements. Through strengthened systematic management, regular scheduling, and on-site supervision, they ensured standardized execution of mining area remediation and land reclamation.

Shougang is advancing green initiatives to lay the ecological foundation for high-quality development. In 2024, the Group remained committed to the coordinated development of ecology and the economy, driving environmental quality and clean production to new heights while achieving progress in green and low-carbon development. Shougang's 2024 "green report card" shows real results: better air, cleaner production, and smarter governance.

■ Gathering Strengths to Enhance Green Growth

By relentlessly advancing green and low-carbon development, Shougang has strengthened its core competencies to deepen integration and reinforce support for sustainable growth. In 2024, the Group's adoption of "green electricity + green hydrogen" and the boost received from green finance have significantly elevated its renewable energy utilization.

Under the sunlight, rows of photovoltaic panels at multiple Shougang sites glisten brilliantly, steadily harnessing the bountiful "photovoltaic dividends" bestowed by nature. Projects such as Shougang Cold Rolling's 1.96MW Phase II PV Project, Shougang Mining Corporation's 100MW PV Project, Shougang Jingtang's 23MW PV Project, and Shougang Casey's 8.8MW PV Project have gone live. Meanwhile, the Group has strengthened its strategic collaboration with Jingneng Group, boosting green electricity trading and effectively reducing carbon compliance costs.

Photovoltaics have become the lowest-cost power source, while green hydrogen, produced using renewable energy (such as solar, wind, hydro, and nuclear power), is hailed as "zero-carbon hydrogen" due to its near-negligible carbon emissions during production. In 2024, the Research Institute of Technology of Shougang Group monitored industry advancements in emerging hydrogen technologies, including seawater electrolysis, photocatalyst water splitting, SOEC (Solid Oxide Electrolysis Cell) water electrolysis, and Metal-catalyzed steam reforming. The institute also engaged in technical exchanges to explore these innovations. Meanwhile, Beijing Shougang tracked industrial trends and surveyed regional hydrogen resource distribution. Shougang Jingtang signed a Letter of Intent (LOI) with a tech firm to secure green hydrogen supply and explore collaborations on pipeline materials, PV mounting systems, and other joint R&D.

The green and low-carbon transformation of the manufacturing industry -whether through equipment upgrades and transformation or R&D in energy-saving and carbon-reduction technologies - faces funding challenges. In addressing these financial concerns, Shougang has demonstrated deep insight and proactive exploration: leveraging finance to enable green manufacturing. In 2024, it coordinated internal and external resources to advance green and low-carbon financial initiatives, providing robust support for the green and low-carbon development of the manufacturing industry. Beijing Shougang Fund supported investments and expanded the asset reserve through the China Life Green Fund and the Shougang Green Energy REITs program. Shougang Finance Company revised its green loan management guidelines and secured People's Bank of China green loan qualifications, disbursing 830 million yuan in green loans.

By expanding financing channels and adopting diversified measures, Shougang is effectively mobilizing capital toward environmental protection, energy efficiency, and clean technologies. Green finance holds immense potential in accelerating the Group's green and low-carbon transformation.

■ Green Transformation for a More Sustainable Future

Blast furnaces, material silos, pavilions, and trestle bridges... Walking through the lush landscapes of Shougang Park, one encounters a striking blend of industrial might and natural beauty, with every scene gradually unfolding like a picturesque painted scroll. As the flagship showcase of Shougang and a new landmark for urban revitalization under Beijing's "Together for a Shared Future" initiative, the park carries the noble mission of cultural, ecological, industrial, and vitality renewal. Guided by Xi Jinping Thought on Ecological Civilization, Shougang Park's development prioritizes ecological revival as its foundation, adhering to a framework of "law-based planning, rigorous systems, reliable technology, and closed-loop management" for environmental protection and restoration. This commitment has already improved the ecology of this historic industrial zone, fueling its green transformation from "fire" to "ice," factory to city, and tradition to modernity. Shougang Park's groundbreaking achievements include developing China's first C40 Positive Climate Development Project and being listed among the first batch of China's protected industrial heritage sites. It has won numerous domestic and international awards, such as the "Excellent Industrial Heritage Protection and Utilization Demonstration Case" from the Ministry of Industry and Information Technology, the "Excellent Case of China's Urban Renewal" from the Ministry of Housing and Urban-Rural Development, the China Habitat Environment Example Award, and the International Award for Planning Excellence. Over the past year, the park has revitalized its vitality through ecological restoration, landscape regeneration, and architectural revitalization, integrating industrial heritage preservation with environmental recovery. The enhancement of the park and its surroundings has established it as a benchmark for post-industrial site rehabilitation and a model zone for green transformation. Its designation as the permanent venue for the ESG China Innovation Annual Conference further underscores its extraordinary significance.

The Group has sharpened its ESG management system, releasing the Shougang Group Social Responsibility Report for thirteen consecutive years and becoming a signatory member of the World Steel Association's Sustainability Charter. In 2024, Shougang issued its inaugural Sustainability Report, which was recognized as a Best Practice Case in the Steel Industry Social Responsibility Blue Book (2024), demonstrating its commitment across four key dimensions: environmental stewardship, social responsibility, governance excellence, and value creation. By elevating its ESG governance standards, Beijing Shougang became the world's first steelmaker to achieve ultra-low emissions across its entire production chain. Both Beijing Shougang and Shougang Jingtang passed carbon certification by the international auditing body SGS and were among the industry's first batch of "Dual Carbon" Best Practice Energy Efficiency Benchmark Enterprises. Shougang uses its expertise in ultra-low emission management to assist over 60 steel companies in completing emission upgrades, transitioning from "green manufacturing" to "manufacturing green" solutions. The Group ranked among the top 10 in the SASAC's "State-Owned Enterprise Social Responsibility · Pioneer 100 Index." Case studies on Shougang Park and Beijing Shougang were also selected for China Media Group's ESG Excellence Practice Reports in 2023 and 2024, respectively. Shougang Park released two pioneering guidelines: the Guidelines on Sustainability Reports of Chinese Enterprises (CASS-ESG 6.0) for the Park Development Industry and the Shougang Park 2023 Green Development Special Report, establishing a "Shougang Model" for industrial park development in China.

Shougang is integrating its corporate strategy with sustainable development principles - from steel manufacturing to urban services by leveraging its distinctive industrial expertise and resource advantages. With ESG practices taking root across all operations, the Group is accelerating the development of core competencies for a green future.

■ Digital Green Innovation, Smart Manufacturing Scenarios

On the production frontlines, employees leverage the data monitoring capabilities and technical tools of the Group's energy dynamic management system to achieve real-time online regulation of various energy mediums. By promptly, efficiently, and rationally balancing blast furnace gas, they strive for "zero gas flaring" while maximizing power generation.

Staff are able to access real-time pollutant emission data from target locations instantly. This is part of Shougang Jingtang's digital platform for online environmental monitoring and integrated management, enabling precise and efficient control of fugitive emissions across all stages of steel production.

Gone are the days of billowing smoke and dust. At Changzhi Iron & Steel's Changtie Green Energy Logistics Park, materials such as coal powder, fly ash, and slag are dispersed via a "one-stop" enclosed system, where goods never touch the ground or require reloading. This approach not only reduces total transport time compared to traditional methods but also significantly enhances clean logistics capacity.

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Over the past year, Shougang Group's subsidiaries have seized all opportunities presented by digital transformation, fully unleashing the amplifying, synergistic, and multiplier effects of digitalization. By intensifying the application of digital technologies, they have established more smart factories, intelligent production lines, and automated processes, "letting data speak, analyzing with data, deciding by data, and executing based on data." This approach has embedded intelligence into every aspect of decision-making and operations, driving the Group's digital transformation forward.

The Group has continued to advance the construction of the life cycle assessment (LCA) system for steel products. Beijing Shougang, Shougang Jingtang, and other subsidiaries have completed the collection of foundational data, updates to emission factor databases, organization-level carbon emissions accounting, and carbon footprint assessments for numerous customer products. They have also optimized the LCA data collection platform, conducted evaluations of the basic data quality level for products, improved the accuracy of carbon footprint calculations, and developed new functions for procurement-side data collection and carbon accounting.

The Group has also advanced digital upgrades and transformations. The Phase II project of Shougang Cold Rolling's "Lighthouse Factory" focuses on promoting the optimization and iteration of knowledge graphs, intelligent inspection and testing, and the development of intelligent control, as well as the advancement of unmanned overhead cranes. Shougang Jingtang, in collaboration with numerous experts, conducted technical exchanges and on-site consultations for its carbon management platform, evaluating its functionalities, operational performance, and integration with management systems to produce a feasibility study report. Shougang Mining Corporation advanced research on intelligent locomotive operation and ore allocation algorithms for the Macheng Iron Mine's transport system.

In 2024, the Group achieved synergistic growth between green development and "smart environmental protection," with digitalization and intelligence delivering significant empowerment across green manufacturing, eco-friendly products, and sustainable supply chains. These efforts have produced low-carbon Shougang models that contribute to the development of new, high-quality productive forces.