The UK Steel Council met yesterday in Cardiff, co-chaired by UK Business Secretary Kwasi Kwarteng and Chair of UK Steel, Luis Sanz, to continue discussions on the sector’s transition to a low-carbon future and the Government’s ongoing support for the costs of electricity.
Welsh Economy Minister Vaughan Gething hosted the meeting at the Senedd and representatives from the six major steel companies, unions and the devolved administrations were present.
The Business Secretary welcomed the opportunity to co-chair it from one of the heartlands of British steelmaking, with companies such as Celsa Steel nearby in Cardiff, Liberty Steel in Newport and Tata Steel in Port Talbot.
The Business Secretary commended the importance of the UK steel industry, including in Wales, for providing high quality jobs and supporting communities. He reaffirmed the Government’s commitment to delivering a thriving sector and supporting its transition to low carbon operations.
The discussion then turned to the impact high energy costs are having on the sector and the recent interventions the Government has undertaken to address this, including extending the Energy Intensive Industries Compensation Scheme for a further 3 years and more than doubling its budget. The move adds to the more than £600 million in relief to the steel industry has received since 2013 to help with high electricity costs.
The meeting closed with the Council agreeing to continue the close cooperation between government, industry, unions and devolved administrations, committing to meet again in the coming months.
Following the meeting, UK Business Secretary Kwasi Kwarteng said
“The steel industry is the beating heart of Wales, with Liberty Steel in Newport to the East, the iconic Tata steelworks in Port Talbot to the West, and Celsa in Cardiff – the location for the latest meeting of our Steel Council.
“Each of these companies plays a key role in supporting vibrant communities, providing high-quality, well-paid jobs. We want to secure this sector’s bright future, whether through our decisive action to support it through globally high energy prices, or seizing the opportunities of the move towards greener forms of steelmaking. Today’s meeting was another important discussion in how Government and industry are working together towards that shared goal.”
Gareth Stace, Director General of UK Steel said:
‘Today’s Steel Council meeting represented an important step forward for the UK steel sector, and it was entirely fitting that industry and government came together to discuss the future of the sector in South Wales, home to two thirds of the UK’s steel production and a place synonymous with steelmaking.
‘After recent action from the Government to narrow the electricity price gap between ourselves and our competitors in Europe, we look forward to working with the Business Secretary, his officials, and other departments to reduce the price gap further.
‘Delivering competitive electricity prices is a vital component in the decarbonisation of UK steel production. Developing a domestic net-zero steel sector will place Wales and the wider UK at the heart of the Green Industrial Revolution and secure a prosperous future for steelworkers and this vital foundation sector.’
Since the last Steel Council in February, the UK Government has:
- Confirmed BEIS R&D funding settlement worth £39.8 billion, including three years’ confirmed funding for the Materials Processing Institute (MPI).
- Announced the successful bids for Phase 1 of the Industrial Fuel Switching competition, including one project involving British Steel and EDF and a second project led by the Materials Processing Institute (MPI).
- Announced its intention to consult on a range of carbon leakage mitigation options, including a carbon border adjustment mechanism (CBAM).
- Extended the Energy Intensive Industries Compensation Scheme for a further three years and more than doubled its budget.