green steel

UK must invest in green steel and protect its industry, ministers warned

Image credit: JAN LINDBLAD JR

The government needs to step up and invest in green steel or risk the UK industry’s collapse, ministers have been warned.

Labour MP Stephen Kinnock urged ministers to follow EU proposals designed to protect the steel industry within the trade bloc, or face a “flood” of foreign steel into the UK.

The Aberavon MP, whose constituency covers the Port Talbot steelworks, was speaking in the House of Commons a day after steelworkers from across the UK demonstrated in Parliament Square.

They were calling for a “proper industrial strategy” for the sector, as new figures show almost 150,000 jobs have been lost in the industry over the past 40 years. The GMB union said its research suggests that between 1981 and 2021 almost 80 per cent of jobs in the entire steel sector have gone.

Kinnock told the Commons: “Hundreds of steel workers gathered in Westminster yesterday to make it absolutely clear they feel that the government is not doing enough, particularly when compared to competitor nations in terms of investing in the transition to decarbonise steel.

“The numbers on that do not lie, but the government is also worryingly slow, we feel, on introducing a carbon border adjustment mechanism (CBAM).

“UK Steel has estimated that almost 23 million tonnes of non-EU steel could flood the UK market if the UK fails to introduce its own carbon border adjustment mechanism at the same time as the EU in 2026.”

The EU’s CBAM would place a tariff on carbon-intensive goods, such as steel, being traded into the bloc. It aims to encourage cleaner, greener industrial production in countries outside the EU.

Kinnock asked the government in the Commons: “Can I ask the minister when will we see the government stepping up and investing in green steel, as they are in competitor countries? And when can we expect the introduction of a British CBAM?”

Business minister Nus Ghani replied: “We have been supporting the steel industry with over a billion pounds available in grants to help decarbonise the sector and then providing over £730m to cover energy costs since 2013.

“CBAM is obviously an issue for many countries, not just ours. We have just finished one consultation and we will in due course be producing a response.”

Shadow business minister Bill Esterson claimed Labour would invest more than the Tory government in a transition to green steel if it was in power.

Esterson said: “The minister said that she recognises the vital role that steel plays in this country, but the UK is the only country in the G20 where steel production is falling.

“It is also the only country in the G7 whose government doesn’t insist on using domestically produced steel in defence contracts. Meanwhile, UK steel producers pay 62 per cent more than their German counterparts for electricity.

“Labour’s £3bn green steel plan will give our industry the bright future that other countries are offering their steel sectors. Labour believes in our steel. Why doesn’t this government?”

Ghani responded: “I am not sure where they are going to get the money to fund this programme of work and I haven’t even got to the end of reading the paper, but they will probably U-turn by the end of it, so I am not sure how sensible it is going to be.”

Earlier this week, trade body UK Steel warned that EU carbon costs could ‘crush’ the UK steel market and almost 23 million tonnes of non-EU steel could flood the UK market without government action.

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