The ministry said in a statement on Wednesday that it would encourage steel producers to use EAFs, which generate less pollution than traditional blast furnaces and involve the melting of steel scrap, as opposed to the processing of iron ore.
The country has recently upped its volume of EAF capacity approvals, which should result in new facilities coming into play from 2018 onwards.
The move is in line with China's anti-pollution campaign, with the ministry also noting that it would continue to cut existing steel capacity and ban the launch of new steelmaking facilities in 2018.
It already reduced steel capacity by 50 million tonnes per annum last year and aims to cut up to 150Mtpa of capacity before 2020.
"We will strictly forbid any new steel capacity to be launched ... and make sure all outdated steel capacity is eliminated and prevented from reopening," the MIIT said.
