Steel campaigners have warned the industry could be “suffocated” amid tighter limits on pollution.
The UK Emissions Trading System Authority announced a shake-up of a scheme which restricts the total amount of greenhouse gases aviation, power and other energy intensive industries, including steel, can belch out.
It said: “From next year, these industries will be required to bring their emissions down at the rate needed to reach net zero goals – sending a clear signal to industry to invest in the long-term decarbonisation that will help the UK to maintain its world-leading position in cutting carbon emissions.
“To ease this transition, the cap will be set at the highest level of the range consulted on, in line with net zero - allowing maximum flexibility for industries.”
Existing free allowances will be maintained until 2026, with the Authority saying: “This incentivises industries away from costly fossil fuels and encourages them to cut their carbon footprint by investing in energy efficiency and cleaner, or renewable technologies, which in turn can boost energy security.”
Steel firms have repeatedly asked for help in switching to greener production - and raised fears for the industry’s future unless they receive support.
The sector is blamed for 14% of the UK’s industrial emissions and 2.7% of all Britain’s greenhouse gases.
UK Steel said that retaining the sector’s free allowances for three years will not be enough to help decarbonise steel.
It warned that “gaps are evident in the ETS reform details”, adding: “With 2026 less than three years away, and with only nine years to decarbonise the steel industry according to the Climate Change Committee, the lack of detail, strategy and financial long-term leadership leaves steelmakers in the dark.”
Director-general Gareth Stace said: “Without a hawk-like vision, a carefully planned capital expenditure and a powerful decarbonisation strategy, we could simply close down steel plants and de-industrialise the nation.
“There are huge question marks over if government really wants to sustain steel, the backbone of British manufacturing, or just leave it to shrink and rely on other nations’ supply.”
He added: “Without carefully thought through Government leadership, decarbonising costs will clearly weigh down and suffocate the steel industry.”
Community steelworkers’ union warned the industry “cannot survive if we continue to pay far more for energy than our EU competitors and it cannot decarbonise if the Government doesn’t support the transition toward net-zero”.
Assistant general secretary Alasdair McDiarmid said: “Community welcomes efforts to decarbonise steelmaking and we are committed to working towards net-zero.
“However, the private sector alone can’t deliver on shared ambitions to protect both our environment and our industry into the future.
“Steelmakers are struggling to find the hundreds of millions of pounds required to decarbonise our industry, and without proper government support these new targets risk job losses and site closures.
“It’s not enough to simply set more ambitious targets, we need the Government to back us to deliver them.”
Hundreds of steelworkers marched on Parliament last week to highlight the threat to the UK’s £2.4billion sector, which employs 34,500 people directly and supports another 43,000 in supply chains.
The Mirror has been campaigning to Save Our Steel since 2015.
* Follow Mirror Politics on Snapchat, Tiktok, Twitter and Facebook
