China is considering a number of tax changes for its mammoth steel industry—including lowering export rebates—to bolster efforts to clean up one of the dirtiest industries in the world’s top carbon emitter.

Officials are considering changes that would encourage imports and reduce exports, according to two people familiar with the matter, who asked not to be identified because they’re not authorized to speak publicly. The measures highlight a focus on servicing the domestic market after the country pledged to cut steel production this year to curb the industry’s carbon emissions.

The tax changes may also alter global steel trade, as China is the biggest producer, importer and exporter. A move to restrict shipments overseas risks leaving a supply gap needing to be filled, just as optimism builds that a post-pandemic recovery will lift global demand. A ramp-up in Chinese purchases from overseas at the same time could tighten markets further.

Changes being considered include lowering export rebates for some steel products, and cutting or removing import duties on some products, according to the people. China is also considering cutting the value-added tax or income tax for domestic iron ore producers, or making companies exempt from the taxes. The details aren’t final and changes could be made, with some polices possibly announced as soon as April.

The country’s customs agency and Ministry of Finance didn’t immediately respond to faxes seeking comment, while calls to the tax bureau weren’t answered.

“The policies could open up inflows of raw materials such as billet and scrap,” Ban Peng, analyst at Maike Futures Co. said. The proposals are “in line with China’s targets to reduce crude steel production to help reach a carbon-neutral economy,” he said.

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Steel makes up 15% of China’s carbon emissions, the biggest chunk among manufacturers, and is drawing increased scrutiny as the country plots its course to a carbon-neutral economy by 2060. There’s already been a raft of output restrictions in the steel-making hub of Tangshan, and the industry is considering medium-term plans to hit peak emissions before 2025, and reduce them by 30% by 2030.

China has used a range of levies in the past to encourage or discourage commodity trade flows where needed, with discounts on steel and aluminum criticized by foreign rivals as an unfair support for overseas shipments.

The country’s steel exports have already retreated since it unleashed a flood of supply in the middle of last decade, sparking a range of anti-dumping measures around the world and sowing trade tensions. China even took in more than it exported in four months of last year, in large part because of an inbound surge in billet, a semi-processed product.

Another increase in billet imports could offset lower domestic output, and also soften China’s demand for iron ore.

Futures for steel rebar fell for a second day from the highest in a decade, while hot-rolled coil rose to the highest since trading began in 2014. Steel prices have surged this month as output restrictions coincide with strong seasonal demand.

Iron ore in Singapore fell as much as 2.5% before trading 0.9% lower at $155.25 a ton by 3:57 p.m. local time. Futures in Dalian dropped 1.7%.

Any moves to encourage domestic iron ore production would chime with calls for China to rely more on captive supplies of the steelmaking ingredient. But its own ore is significantly less pure than high-grade imports from Australia and Brazil, and any efforts to boost processing could potentially clash with the aim to address air pollution.