The UK is falling behind the rest of Europe when it comes to developing a new green steel sector, a report has warned.
Hydrogen-based steel production, seen as the most likely low-carbon alternative to using polluting coking coal to produce the metal, is gearing up in many European countries – but plans have not got off the ground in the UK.
A report from the Energy and Climate Intelligence Unit (ECIU) said 23 hydrogen steel projects are either planned or under way across Europe, including plans to produce hundreds of thousands of tonnes of green steel by as early as next year.
The UK is well placed with its long-standing steel industry and research sector and large offshore wind resources which can make clean hydrogen, and stands to secure thousands of jobs and an economic boost from making the switch to green production.
But there are no concrete plans for using hydrogen to produce primary steel, and only “vague” plans for one project to install technology which captures and buries carbon emissions from a plant, the report said.
While a £250 million clean steel fund was launched in 2019 to decarbonise the sector, under current plans the money will not be available until 2023, while there are delays to the hydrogen strategy, the report warned.
Current levels of ambition in the UK are not enough to ensure the industry catches up in the race to clean up steel production, it said.
Steel production provides more than 33,700 well-paid jobs directly in the industry in areas such as Scunthorpe, North Lincolnshire, and Port Talbot, Wales, but the industry is under pressure from Asian imports, oversupply and investment problems.
At the same time production – which is highly carbon intensive – must cut its emissions by 23% this decade and decarbonise by the 2030s, as part of the UK’s efforts to cut climate pollution to zero overall by 2050.
Dr Jonathan Marshall, ECIU head of analysis, said: “This stark illustration of just how far and fast the UK is falling behind in the race to green steel should be a wake-up call both to ministers and the communities reliant on jobs in the steel sector.
“Long investment cycles mean that cutting emissions in hard-to-decarbonise sectors must be under way now.
“This is essential not only if we are to hit climate targets, but also if the UK is serious about creating jobs and industries that are fit for the future.
“The UK has enviable resources to produce clean hydrogen from renewable energy, using this to underpin a clean steel industry will bring vast economic benefits across the country.”
And he warned: “EU nations are clearly seeing the opportunities presented by decarbonising their steel sectors; the UK needs to recognise that this is a competitive global market, so sticking with the status quo, or worse, arguing that the sector will remain reliant on coking coal, just doesn’t cut it.”
Responding to the report, shadow business minister Seema Malhotra said it made no sense for the clean steel fund to remain out of reach until at least 2023, and accused the Government of having no real plan for steel.
“Labour has called for a green economic recovery to back our manufacturers and create secure, green jobs, but ministers have not listened.
“Meanwhile tens of billions have been allocated for green recoveries in France and Germany. We cannot afford to be behind the curve.
“Our Government just isn’t stepping up to provide UK steelmakers with the support they need, holding back the industry and threatening its future,” she said.
A Business Department spokesperson said: “We are working closely with Britain’s steel sector to support its transition to a low-carbon future.
“We have already announced a £250 million clean steel fund to support the industry to reduce carbon emissions, and our new industrial decarbonisation strategy sets out how it can be done in a way that supports competitiveness, jobs and clean growth.”