Recent measures of carbon dioxide emissions from the steel industry of China have indicated a high rate of total CO₂ emissions from the industry, even compared to the rest of the world. So, CO₂ emission reduction in China’s steel industry was analyzed, coupling the whole process and scenarios analysis. First, assuming that all available advanced technologies are almost adopted, this study puts forward some key potential-sectors and explores an optimal technical route for reducing CO₂ emissions from the Chinese steel industry based on whole process analysis. The results show that in the stages of coking, sintering, and iron making, greater potential for reducing emissions would be fulfilled by taking some technological measures. If only would above well-developed technologies be fulfill, the CO₂ emissions from 5 industry production stages would be reduced substantially, and CO₂ emissions per ton of steel could be decreased to 1.24 (ton/ton-steel) by 2020. At the same time, the scenarios analysis indicates that if mature carbon-reducing technologies are adopted, and if the difference between steel output growth rate and the GDP growth rate could be controlled below 3%, CO₂ emissions from China’s steel industry would approach the goal of reducing CO₂ emissions per GDP unit by 40%–45% of the 2005 level by 2020. This indicates that the focus of carbon dioxide emissions reduction in China lies in policy adjustments in order to enhance technological application, and lies in reasonably controlling the pace of growth of GDP and steel output.