UK placed to be 'world's first net zero steel sector', says report

Echoing the recommendations of a report published yesterday by liberal conservative think tank Bright Blue, UK Steel said the government should work to shield steel makers from the UK's high industrial electricity prices, while stimulating the nascent market for low carbon steel. It sets out the case for a sweeping policy package that would incentivise the reuse of scrap steel and curb exports of the waste material, drive investment in emerging green steel production technologies, and introduce measures to discourage steel buyers from importing high carbon steel products from abroad.

The report, which was requested from industry by the government last year, argues the decarbonization of steel presents a major opportunity to reindustrialise the UK whilst creating a raft of green jobs, noting that demand for finished steel is expected to grow from 9.4 Mt in 2015 to 11 Mt in 2030.

Commenting on the publication of UK Steel’s report ‘Net zero steel: A Vision for the Future of UK Steel Production’, UK Steel Director General, Gareth Stace said:

''This landmark report by the steel sector, developed in collaboration with our partners in Government and the trade unions, demonstrates the scale of opportunity to seize. Delivering Net Zero in this strategic sector is a generational challenge which will need far-sighted support from Government and a positive policy environment to achieve. As we look ahead to a change in Government, it is essential that the current focus on our sector is not dropped.

''No steel sector or steel company in the world has yet successfully decarbonized. There is a first-mover opportunity for the UK to become the first steel sector which delivers on Net Zero. If we accomplish this, we will transform almost 35,000 steel jobs into green jobs. These roles already underpin communities that have made steel for a century. By moving them to green jobs, we secure the future of these local economies for the long term and support high-paying jobs in areas that have historically suffered from a lack of investment. We can ensure that Teesside, Scunthorpe, and South Wales can lead the world in Net Zero steelmaking.

''There is not one single technology to decarbonize, but a range, including electrified steelmaking, carbon capture and storage and hydrogen. We export much of our scrap steel only to reimport it, meaning there is fertile ground for electric arc steelmaking. Our location near the North Sea means we are perfectly placed to harness cost-effective carbon capture and storage steelmaking. In the future, hydrogen-based steelmaking may also become more attractive.

''The challenges for the steel sector, therefore, are our existing high industrial electricity prices. These, which strangle investment, currently sit far higher than our European competitors.

''Some argue that to bring down our emissions, we simply import our steel. Such a choice would be devastating to steelmaking communities and do nothing to bring down global carbon emissions. We cannot offshore our emissions and hope that others will do the decarbonization. We must have a steel sector that is prosperous, decarbonized, and domestic.

''Our report sets out how we want to work with Government in a partnership to deliver a steel sector fit not just for today, but for the future.''