Strong support for a steel deal to help in the green transition has been voiced as the Humber was revealed as one of 20 Net Zero hotspots for economic activity.
It is understood an offer may be on the table to support British Steel on decarbonisation, while navigating soaring energy prices and an economic downturn. A £300 million war chest could be tapped into, a similar figure to that already invested by the Chinese Jingye Group, since it bought the business out of liquidation in early 2020.
In a briefing supporting the launch of the report from CBI Economics and the Energy and Climate Intelligence Unit, underlining the important future steps to capitalise on the UK’s position in the clean economy, the vital role for traditional industry was flagged while new jobs in hydrogen, carbon capture and further offshore wind development were welcomed.
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British Steel is the single largest employer in the Humber region, with extensive operations in the North East also. Both areas were on the map in the new study. Chris Stark, chief executive of the Climate Change Committee, said: “I hope we will shortly see a package on green steel here in the UK. That looks to me to be the first of the moves the UK can make.
“I’m very very comfortable with the kind of support I hope is going to be offered to that steel sector. What we face before us is a set of industries located in parts of the UK where we need to have investment, that probably have one investment cycle left. Major industries, one investment cycle left, to get to that goal of Net Zero. We should be accelerating that investment and supporting that investment as much as we can, because those industries are the ones that will compete then after we have made the investments."
Mr Stark’s comments were backed up by Simon Clarke, MP for Middlesbrough South and East Cleveland, and a former Secretary of State for Levelling Up.
He said: “This isn’t just about trying to create new jobs, and the new opportunities we’re trying to unlock, there are a host of carbon intensive industries which are really at great risk here.
“I say that as someone who represents a steel constituency myself. British Steel has a presence at Skinningrove which is absolutely at the the highest possible end of complex steel manufacture, and those are good well paid jobs in a part of East Cleveland that would have no alternative were they to go.
“It is absolutely imperative that when we look at the requests from the steel industry for financial support - and let’s be clear they are facing both very high energy costs because of the current situation, but also because of the way we structure our energy markets, we should be able to make this not just a bail-out, but something constructive that enables that move to green steel. You can do that, the technology is there, we don’t want just more of the same. We want to make sure that if we are able to support the steel industry, and I strongly, strongly hope the Chancellor and Prime Minister will see the need to do this - because they will face trouble in parliament, frankly, if they don’t - that they do this in the most imaginative way.”
Mr Clarke said industrial energy users “effectively cross-subsidise domestic costs”, stating it was a “structural obstacle the UK steel industry faces compared to its competitors, for example on the continent, that we should address”.
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