The UK government is negotiating with the EU to allow state aid for the struggling steel industry

Steel industry to get energy cost refunds after EU ruling

Energy-intensive industries, including the crisis-stricken steel industry, will receive refunds for energy policy costs following an EU decision on state aid, David Cameron has said. 

During questioning in Parliament, the UK Prime Minister said that once Brussels approves governmental support of the industry, steel makers will start receiving refunds, which will continue until 2020.

"On energy costs, I can announce today that we will refund the energy-intensive industries for the full amount of the policy cost they face as soon as we get the state aid judgment from Brussels,” Cameron said.

"And I can confirm that payment will be made immediately and that payment will be made throughout this Parliament - far more generous than what has been proposed by Labour."

Cameron’s spokesman was not able to provide a timeline for the refunds to start, saying it was solely dependent on negotiations with EU officials.

High energy prices together with cheap imports and emission taxes have caused a major crisis in the UK steel sector, with thousands of job cuts having been announced in recent weeks by Tata Steel and SSI in Redcar, Scunthorpe and Scotland. Further losses are threatened at steel processing giant Caparo Industries, which has gone into administration.

Steel workers have lobbied MPs in Parliament ahead of an Opposition Day debate on the steel industry, during which Labour will press for immediate measures to prevent further job cuts.

According to Gareth Stace, director of trade body UK Steel, the state of the industry is such that it is ‘likely to die’ without urgent help.

Stace’s comments came as he was giving evidence to the Business Select committee.

"If we were a patient on an operating table, we are bleeding very quickly. And we are likely to die on that table," he said, adding that a fifth of the sector's UK workforce had lost their job or were facing immediate redundancy following a recent wave of cuts.

The Business Department hinted the steel industry will be able to take advantage of ‘special flexibilities’ to comply with new EU rules on emissions.

Business Secretary Sajid Javid, who is visiting Brussels for talks on steel, said he recognised the costs the regulations could have, so he was working with businesses to agree a 'flexible' way forward that does not damage competitiveness.

However, Stance said that in addition to the high energy costs and the emissions directive, the steel industry also needs to see a reduction in business rates and elimination of unfair trade practices.

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