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A PUBLIC consultation on the future of the UK’s steel industry has been launched by the government, which industry and unions have received as “vital and welcome”.
The consultation will be open until the end of March for businesses, investors, and prominent steel communities to submit responses to 30 questions. The questionnaire covers a broad range of issues relating to the UK steel industry, such as identifying the most suitable regions to invest in green steelmaking technology. It also includes questions about the importance of innovation, particularly regarding decarbonisation.
The consultation will inform the government on how to invest the £2.5bn (US$3.15bn) it has earmarked to help grow the UK steel industry. The government will publish its “steel strategy” in the second quarter of the year which will include more detailed plans on how the money will be spent.
The government wants the strategy to help boost domestic steel manufacturing and to incentivise UK public projects to use British-made steel. The government has pinpointed high energy costs and “unfair trading practices” in other countries as challenges for the UK steel industry. On the day the government launched the consultation, business secretary Jonathan Reynolds warned on the BBC’s Sunday with Laura Kuenssberg show that Donald Trump’s threatened 25% tariffs on British steel would be a blow to both the UK and US economies.
Last week, the government confirmed that London Heathrow Airport’s major expansion, including a third runway and upgrades to two terminals, will only use British-made steel. They estimate the project will require 400,000 t of the metal.
Chris McDonald, Labour MP for Stockton North and a chemical engineer who worked in the steel industry for over 20 years, said that “this investment should be a big boost to engineering both in the steel industry and in supply chain businesses, as steel companies look to supply growing markets such as renewable energy and defence.
“It will come with a significant demand for innovation support, as steel companies adapt process technology to make a wider range of steels and develop new steel products for demanding applications, such as offshore wind and nuclear fusion.”
Gareth Stace, director-general of trade association UK Steel, said: “The government’s commitment to our steel sector is both vital and welcome. A robust, bold, and ambitious steel strategy has the power to reverse the sector’s decline, particularly as we face increasing competition from imports benefiting from more favourable conditions.
“By setting out a clear business plan and roadmap for investment, the government can secure a brighter future for our industry, safeguard jobs, and support steelworkers and their families.”
It has also been welcomed by unions. Unite general secretary Sharon Graham said: “The launching of the steel strategy is a critical landmark for a foundation industry, whose success is essential to the wellbeing of our economy and our national security.
“It is the first time in decades that a government has made a positive commitment to invest in the UK steel industry. It is essential that all such investment is clearly linked to rock-solid job guarantees. This strategy must act as the foundation for building a successful green steel industry in the UK.
“Going forward, the government must tackle excessive energy charges which make UK steel overly expensive, while introducing watertight rules to ensure the public sector always buys UK steel.”
Shadow business secretary Andrew Griffith said: “We look forward to seeing the details of this plan. A clear part must be steps to reduce the cost of energy which is placing an intolerable strain on UK steel.”
‘Long future’
The plans are likely to focus heavily on building electric arc furnaces (EAFs), which melt scrap metal to produce high-quality steel with emissions reductions of 90% compared to blast furnace production. The government describes EAFs as able to “give the industry a long future” and will place heavy emphasis on scrap metal recycling in its investment plans.
While more environmentally friendly than traditional steelmaking methods, EAFs have become a contentious issue in steelmaking communities due to their significantly smaller workforce requirements compared to blast furnaces.
In October last year, Tata Steel confirmed that it will be launching an EAF in Port Talbot, South Wales, aiming for production by 2027. The move follows the closure of two blast furnaces just a month earlier, resulting in the loss of 2,500 jobs. Tata anticipates that the EAF’s construction will create 500 jobs.
