Greater weighting should be given to environmental factors in the UK’s procurement of steel, while the higher electricity costs paid by UK steelmakers than their EU counterparts need to be addressed, says the Trade Unions Congress (TUC).
Buying steel from China can produce up to 50 times more carbon than sourcing from the UK, TUC points out.
When the UK introduces its own Emissions Trading Scheme following Brexit in 2021, moreover, it must at least penalise steel producers no more than the current regime, TUC adds.
The comments come as part of the UK trade union federation’s report published on Friday outlining a balanced energy policy to meet the UK’s net zero commitments.
Financial support for the steel industry also needs to be brought forward. “The UK government has announced more than £500 million to help transition, through the Industrial Energy Transformation Fund and the Clean Steel Fund – but much of this is not available until mid-2020s,” TUC says in the report sent to Kallanish. “Bringing this funding forward could help us invest out of crisis.”
TUC says Tata Steel’s closure of its Orb Electrical Steels unit in Newport, Wales at the end of last year was a missed opportunity. An investment of around £20-40m ($26-53m) was seen required to upgrade it to make electrical steel for car engines.
“The electrical steel that Orb could have made for electric motors represented a small part of the value of the power train in isolation, but the capacity could have incentivised others to invest in other essential parts of process, like stamping and laminating, and so persuading companies to build powertrains for electric vehicles in the UK,” says the federation. This could mean lost value of more than £1 billion over ten years to the economy, it adds.