UK well behind EU in plan to decarbonize steel industry: UK nonprofit

The UK has fallen significantly behind Europe on its strategy to decarbonize the steel industry, with only one low carbon steel project being developed, independent nonprofit UK Energy & Climate Intelligence Unit said in a report published March 7.

The report found that the European Union had increased the number of low carbon steel projects planned or in progress to 38 in 2023, up from 23 in 2021.

As a result, the EU remains well ahead of the UK, which currently accounts for only one planned project, up from zero in 2021.

Within the EU, the group said the increase in natural gas prices in 2022 arising from Russia’s invasion of Ukraine has doubled the number of low-carbon steel projects utilizing green hydrogen, produced by splitting water into hydrogen and oxygen using renewable energy.

“Electricity prices have risen sharply in the two years since as a result of the Russian invasion of Ukraine, in part pushing up the gas price,” the report said.

In contrast, the report found that EU steel projects using blue hydrogen, which splits natural gas utilizing steam methane reformation and incorporates carbon capture and storage, or CCS, technologies, declined by 67% between 2021 and 2023.

According to the group, the single UK project being planned, an initiative from business consortium Zero Carbon Humber, which aims to create a decarbonized industrial cluster in Teesside and the Humber with partners including British Steel.

“The project will look at introducing blue hydrogen for EIIs Steel Group, including British Steel’s Scunthorpe plant,” it said.

The report said Germany alone has invested Eur8.5 billion in decarbonizing its steel industry.

By comparison, the group said the UK continues to face uncertainty surrounding support for the domestic steel industry, although it noted that the government was due to allocate the GBP250 million Clean Steel Fund this year.

Industry association UK Steel did not immediately respond to a request for comment.

Platts assessed Northwest Europe hot-rolled coil at Eur830/mt ($878/mt) ex-works Ruhr March 7, up from Eur610/mt Dec. 1, 2022, according to S&P Global Commodity Insights data.

— Euan Sadden