Abstract: In order to deal with China's steel industry issues,such as high energy consumption,huge CO2 emissions and serious oversupply led to steel companies' large losses et al,the Chinese government launched a series of corresponding policies,such as elimination of backward production capacity; promote energy saving technology and the establishment of a national carbon trading market policies. With the help of LEAP(Long-range Energy Alternatives Planning System) software,this paper established a LEAP-Policy model. Then based on the production policy of phasing out backward production capacity and the clean production policy of energy saving and emission mitigation technology and climatic change policy of the establishment of carbon exchange market,A basic scenario and three policy scenarios are established for the simulated analysis of the energy saving and emission mitigation potential of China's steel industry. Researches indicate there is great potential for the CO2 emission mitigation in steel industry and the ordering for the effects of 4 scenarios is:carbon exchange market scenario(ET) > production reduction scenario(CEC) > technology promotion scenario(TI) > basic scenario(BAU). The carbon emission trade market scenario is the best scenario with the best emission reduction and reduces energy demand by 60.5% compared to basic scenario(BAU) in 2040,and CO2 emission reduction by 68.4% in 2040.This study reveals that energy consumption and CO2 emissions of the iron and steel industry could be lowered significantly if the policies are implemented.