Steel sector trade body UK Steel has unveiled a new report in which it urges the Government to capitalise on the UK’s current competitive advantage – that we generate over 10Mt of steel scrap each year – to create the conditions needed for a vibrant, circular economy that makes the best domestic use of scrap.
According to UK Steel, as steelmakers in the UK and abroad journey towards decarbonising, steel scrap will become an increasingly sought after raw material, with global demand expected to rise by 30% by 2030 and over 60% by 2050.
Steel Scrap: A Strategic Raw Material for Net Zero Steel, says that without action, the UK risks stripping itself of a vital resource to produce net zero steel at a time of rising domestic demand. Forty three countries are already taking action to secure their steel scrap supplies and the European Union will introduce exportr restrictions to non-OECD countries from 2027 unless they can demonstrate sustainable practices. That alone will cause an additional draw on UK supplies from countries that can no longer source from the EU.
UK Steel says that exporting scrap has clear environmental impact and estimates that the UK's export of steel scrap and subsequent re-import of steel gives rise to an additional 1.5Mt of CO2 each year, compared to entirely processing steel scrap in the UK.
What is shocking is that the UK produces more than 10 million tonnes of scrap a year, but exports over 80% of it."Gareth Stace, director-general, UK Steel
The report proposes three key action points to help step up the UK’s environmental obligations and safeguard the vital scrap supplies needed for UK net zero steel production:
- Uphold standards by only allowing scrap exports to countries that can demonstrate their ability to treat waste sustainably.
- Incentivise retention of scrap to meet domestic demand by reducing price support offered to scrap exports through the Packaging Recovery Note framework.
- Incentivise and support greater processing of scrap to improve quality such as through R&D funding, removal of VAT on high quality scrap, and inclusion of scrap and the minerals it contains in the Critical Minerals Strategy.
Commenting on the report launch, Gareth Stace, UK Steel Director-General said: “The UK’s steel sector is undertaking a radical transformation on its journey to Net Zero and steel scrap will be at the heart of this. What is shocking is that the UK produces more than 10 million tonnes of scrap a year, but exports over 80% of it. With so many countries around the world acting swiftly to secure their own supply and restricting their exports, we cannot just sit on our hands.
“The UK steel industry will not use all the domestically generated scrap and some of it will rightly be exported, but we must get the balance right. It just makes sense that, here in the UK, we make the most of this resource which we have in abundance, rather than letting it go and importing raw materials instead. Exporting huge volumes of this precious material only creates a bigger carbon footprint and means we are shirking our environmental responsibilities.
“Steel scrap is core to our rapid transition to Net Zero. Next to major Government funding commitments and competitive industrial electricity prices, scrap policy is the final piece of the jigsaw to enable the decarbonisation of the UK steel sector and a low-carbon circular economy.”