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Kallanish Kallanish

Knowledge matters Knowledge matters

May, 18th 2021

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NOV 18

Decarbonisation needs local procurement, competitive electricity: UK Steel


UK Steel says the government must ensure local steel procurement for the green infrastructure development anticipated as a result of its new “Ten Point Plan” for a low-carbon economy. Moreover, prohibitive industrial electricity prices still need to be addressed given that decarbonisation will lead to higher electricity use.

On Wednesday the government announced its so-called “Green Industrial Revolution” that it says will involve some £12 billion ($15.9 billion) of investment to create and support 250,000 jobs.

The programme will support offshore wind power, hydrogen production, new nuclear plants, electric vehicle production, public transport investment, and research projects for zero-emission planes and ships. “Green” homes and public buildings, as well as carbon capture will also be in focus, among other areas.

UK Steel says the plan represents “…bold steps to help reduce the UK’s carbon emissions and critically include measures that will help the steel sector in its green transition.”

“Crucially, new green infrastructure is precisely what the economy needs to rebound, and the UK steel industry is ready to support the Government’s build back better strategy by supplying the world-class steel that is essential for our offshore wind, energy-efficient buildings, electric vehicles, and hydrogen networks,” UK Steel director general Gareth Stace says in a note sent to Kallanish.

“It is critical that the Government expands this infrastructure strategically, ensuring that these projects support jobs and growth in the UK, and delivering the largest possible return for taxpayers money by maximising the UK content of these major projects. The Government must set clear objectives for steel procurement in these major projects, as happens in the United States,” he adds.

The new government plans ominously omit a critical issue, however. “The Government’s continued silence on industrial electricity prices remains a major concern,” Stace continues. “All options of decarbonisation will lead to higher electricity use for the steel sector and many other industries, making high power prices a substantial barrier to meeting the Net Zero target.”

Adam Smith Germany