Call For More Funding For Green Steel Production

The government needs to provide more help with electricity costs to boost steel recycling and eco-friendly production methods, according to a recent parliamentary committee report. Materials Recycling World (MRW) reports on the findings of an enquiry by the Environmental Audit Committee (EAC).

The Philip Dunne, a Conservative MP and chair of the EAC, wrote of the inquiry’s findings in a letter to the business secretary, Kwasi Kwarteng. Currently, the UK produces 11.3 million tonnes of scrap steel per year. Of this amount, 8.7 million tonnes are exported, and 2.6 million tonnes are recycled for use in the UK.

The letter said: “Secondary production refers to the recycling of scrap steel in an electric arc furnace. [Inquiry] witnesses frequently highlighted to the committee that the adoption of green steel technologies is limited by current electricity prices in the UK, which are higher than those charged to European competitors.”

Dunne’s letter continued: “Witnesses have highlighted to us that mandating the requirement for green steel in public infrastructure will help to stimulate market demand for green steel and instil confidence in the industry to invest in green steel technologies.”

It went on: “Members heard that this method is not typically considered by the industry, owing to uncertainty around the availability of suitable, sustainably sourced biomass products and competition with other sectors.”

Part of the reason that the UK exports so much of its scrap steel is that it does not have the capacity to make domestic use of it. However, Dunne notes that the potential is there for the situation to improve, and efforts should be made to do so, otherwise the UK would become more heavily dependent on steel imports in the future.

The British Metals Recycling Association (BMRA) warned in May that the metals recycling sector had been hampered by the loss of subsidised red diesel on 1 April.

BMRA head of policy Antonia Grey said that the Industrial Energy Transformation Fund (IETF), which is a £289m fund set up to help industry switch to low-carbon fuels and upgrade equipment, was not enough to cover the losses faced by the metal recycling sector. She pointed out that it could only be used within a site boundary.

Grey said: “Given some 30% of our members are either not connected to the grid or cannot draw enough power, we are continuing to liaise with the BEIS team to demonstrate the need and benefits of including funding to cover site electrification in Phase 3 of the IETF. This would see help being afforded to members to cover the cost of connecting to the grid.”

Other sectors, including quarrying, mining, and construction, have been given access to a separate £40 million Red Diesel Replacement Fund, but the metal recycling sector has been excluded from this.  Business, Energy and Industrial Strategy (Beis) Minister, Greg Hands, responded that further fuel switching schemes would be available from Autumn 2022.


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