Producing steel in the UK is essential to any decarbonisation strategy, as we should not rely on foreign imports of steel which we have no environmental control over. Such a practice could result in lower emissions in the UK, but those emissions would simply have been offshored together with local jobs. It would be a false economy. Only by maintaining and decarbonising steel production in the UK can we ensure a reduction in steel related emissions globally.
But let us be clear, decarbonising steel production is an enormous challenge, both technically and commercially, and will be very difficult to do by 2035 as recommended by the Climate Change Committee. The sector is being asked to fundamentally transform how steel is made in just 14 years, moving to production methods not yet available at commercial scale.
If the Government accepts the CCC’s advice, it must deliver the right policy framework to do this, just as it has for the power sector over the last decade. The onus is on the Government to create a route to decarbonisation for our steel industry, where it can produce in a low-carbon manner whilst continuing to compete in domestic and international markets. This has to include delivering access to competitively priced power, as all decarbonisation strategies will see an intensification of electricity consumption, and our
steelmakers currently face the highest industrial electricity prices in Europe.
The UK can have a thriving, low CO2 steel industry in the future, but the government must provide the right business landscape for the sector to transform while still remaining competitive.