Press release: The UK needs a pathway to a future-fit green steel industry
Today’s announcement on the Scunthorpe steelworks, hot on the heels of September’s announcement on Port Talbot steelworks, provides one step in transition to a clean competitive steel industry in the UK. But one step does not make a pathway. International non-profit, SteelWatch is calling on the UK industry to do better.
‘Transition plans need to be negotiated with workers and communities, not just announced with vague detail that creates fear. Beyond one conversion of a blast furnace to electric arc furnaces, a full plan for a future-fit industry with competitive sustained jobs is needed. There is an opportunity here to modernise a critical industry, in the UK and globally.’ said Caroline Ashley, SteelWatch Director
The news of the transition is a huge stress for thousands of families already facing financial strain. The concentration of these jobs in one steel-reliant community, where new jobs will depend on retraining and new industrial investment, makes the impact all the more challenging. And it makes the need for a long-term strategy more acute.
There is a wider perspective here to explore: how the global steel industry, responsible for 7% of global emissions, decarbonises and how the UK remains competitive in that zero emissions future.
Retiring blast furnace steel production is essential. SteelWatch analysis shows that a business as usual approach to continued blast furnace production would gobble up almost a quarter of the carbon budget that remains for the entire planet (all countries, all sectors) to have a 50% chance of staying within 1.5 degrees of warming. Business as usual cannot be tolerated.
Steel produced through the blast furnace route drives over 2 tonnes of CO2 emissions per tonne of liquid steel. So the 1023 blast furnaces in operation globally will all need to be phased out for a net zero industry. OECD countries need to lead the way.
Blast furnaces also drive toxic air pollution for workers and communities.Closure of a coking plant in Pittsburgh (USA) led to a 42% drop in cardiovascular-related emergency room visits. The US Burns Harbor steel plant, with its 2 blast furnaces, emitted substantial lead and cancer-causing benzene in 2016, earning it the title of the ‘largest source of industrial lead pollution‘ in the US.
Local community protests and actions are often driven by such health concerns and opposition to the dirty plants. In the Netherlands this year, Tata Steel is facing protests to close polluting coke ovens linked to blast furnaces in ‘People vs. Polluters’ demonstrations.
The market has started to change and competitiveness requires adaptation.
The market is changing. If UK steel does not shift to greener technology, it will lose competitiveness, putting many more jobs at risk.
In September, an update came out on the steel ‘Breakthrough Agenda’, which reported that 13 Mt of near fossil free steel capacity was in the pipeline, with a further 58 Mt of near zero emissions capable plants. This is not enough, but it shows which way the wind is blowing.
The majority of direct jobs in steel are down-stream of the iron-making: the estimate in Germany is 96%. Agora recently outlined how steel making countries can import green sponge iron to build a future fit industry, safeguarding over 90% of jobs in steel. Then there are all the downstream jobs (such as in car-marking) too, which will be supported by building a competitive future-fit steel sector.
Similar analysis in the steel heartland of the Ohio River Valley concluded ‘a transition to fossil fuel-free steelmaking could grow total jobs supported by steelmaking in the region by 27%- 43% by 2031’, despite an expected 30% fall in regional jobs supported by traditional steelmaking.
The pace of market change is about to pick up. The EU is tightening the emissions trading scheme for EU steel producers and so will levy carbon border adjustments on carbon-intensive steel imports to the bloc. In the US the Inflation Reduction Act is catalysing faster market development. To stay future-fit, companies have to invest in cleaner steel.
Electric Arc Furnace (EAF) is one step, but not enough for a future-fit decarbonised industry.
Across Europe, research and investment is going into low emissions primary production. In Sweden, construction has begun on H2 Green Steel’s site where green hydrogen and low-emission steel will be produced. In Spain, ArcelorMittal has announced the “world’s first full-scale zero carbon-emissions [scope 1 and 2] steel plant” to be in operation by 2025. In countries such as Australia and Namibia, early development of green Hot Briquetted Iron (iron ore reduced with green hydrogen) is underway, which could be shipped to steel-makers around the world to produce green steel.
An opportunity for a thriving future-fit industry
To build a UK and global low-carbon steel industry, at least three more strategies are essential as part of a coherent industrial strategy that is jointly planned with unions and communities and embraces net zero as a source of competitiveness:
- Radically increased efficiency in how steel is used and recycled.
- Ensure renewable energy supplies for EAFs, so the full climate benefits of scrap-based steel is secured.
- invest in primary production technologies of the future. That means laying the pathway and public investment support for primary steel production from green hydrogen direct reduced iron, and testing out new technologies such as direct electrification of steel production.
There is an open door here for UK leadership in steel decarbonisation, building on UK skills, ingenuity and history.
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