China’s iron and steel sector has met many obstacles, such as high energy consumption and huge CO2 emissions. In order to deal with these problems, the Chinese government has launched a series of corresponding policies. With the assistance of Long-Range Energy Alternatives Planning System (LEAP) software, this paper established the LEAP policy model to explore performances of industry policies formulated by the government. The model consists of a baseline scenario and three policy scenarios based on different policies. Three policy scenarios in the LEAP policy model are based on policies of phasing out backward production capacity, promotion energy saving technologies, and establishment of a carbon emissions trading market. Results indicate that there is great potential for the CO₂ emissions mitigation in the iron and steel sector. The effects of four scenarios are ranked as follows: emissions trade scenario (ET) > cut excessive capacity scenario (CEC) > technology improvement scenario (TI) > business-as-usual scenario (BAU). From the point of view of the iron and steel industry, this research tries to cast light on the future performances of industrial policies, and the results reveal that CO₂ emissions would be abated significantly if those policies were successfully implemented.