UK Steel has welcomed the government’s response to the consultation on the British Industrial Competitiveness Scheme (BICS), but highlighted that it will not reduce electricity prices for steelmakers.
Despite reducing costs in other parts of the steel supply chain, UK Steel continued that the scheme does not address the ‘core competitiveness challenge’ that has been exacerbated by recent events in the Middle East.
Frank Aaskov, director, energy and climate change policy, UK Steel, commented: “The BICS will bring welcome relief for parts of the steel supply chain and manufacturers not currently covered by existing schemes and materially lower their energy bills.
“But it will not lower electricity prices for steel producers themselves, who remain exposed to exceptionally high wholesale power costs. That problem has intensified sharply in recent months. As a result of the Middle East war, UK steelmakers are now paying nearly 80% more for electricity than competitors in France and Germany, up from around 25% previously.
“This is happening despite the support already in place and reflects the UK’s continued exposure to gas‑driven electricity prices.”
In 2026, industrial electricity prices in the UK are at ~£84/MWh, while in France its ~£48/MWh and ~£65/MWh in Germany.
UK Steel highlighted that this disparity means the industry faces an additional £82m in annual electricity costs when compared to France.
Aaskov added: “To make the Steel Strategy a success and deliver the Government’s industrial and decarbonisation ambitions, additional measures are now essential. That means targeted action to bring wholesale electricity prices into line with our European competitors that gives industry the confidence to invest.”
