Producers want subsidies and cheaper power
Save time by listening to our audio articles as you multitask’s at Port Talbot in south Wales and British Steel’s at Scunthorpe in Lincolnshire. Both make iron and then steel in blast and basic oxygen furnaces, using iron ore, coke—made from coal—and other materials. A first step to greener steel would be to switch to electric arc furnaces , in which the main inputs are scrap steel and electricity. British Steel is also looking at carbon capture.
is to use hydrogen in “direct reduction”, a process that reduces iron ore to metallic iron for feeding intoThe clock is ticking: one blast furnace at Port Talbot will need replacing, refurbishing or decommissioning in perhaps three years. The cost of switching Port Talbot tos has been put at up to £3bn . Upgrading Scunthorpe will also cost a ten-figure sum. These would be gulpworthy amounts even in a thriving industry. But steel in Britain is struggling.
Last year output slid by 16% to 6.1m tonnes, the lowest amount since 1932 . British Steel, bought out of insolvency by Jingye, a Chinese company, in 2020, is reportedly contemplating 800 job cuts at Scunthorpe. Last month Liberty Steel said it would reduce production at itsin Rotherham, in Yorkshire, and idle other facilities; as many as 400 jobs may go. Indian-owned Tata SteelMany in the steel industry think the future could yet be brighter as well as greener.
The first is a hefty subsidy for the switch to greener steelmaking. Canada, France, Germany, Spain and others are already doling out plenty for boths and hydrogen-powered direct reduction. Cash is on offer in Britain too: £300m each, it is said, for Tata and British Steel, coupled with a carbon border tariff, similar to one being concocted in the European Union, to keep out dirtier imports.
Would it matter if the steel industry faded away? Perhaps not. Britain is a small steelmaker these days, 27th in the world, below Austria and Belgium. It imports more than half of its steel already. But decommissioning and redundancy are also far from costless.would lose jobs that pay better than the national norm. And steel, like energy, is something for which few governments like to rely wholly on foreigners. Steelmaking in Britain has muddled through for years. It may end up doing so again.
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