Concern High Electricity Prices Will Slow Steel Recycling

The steel industry has warned of the negative effect that soaring electricity prices might have on the rate of scrap steel recycling. Materials Recycling World reports that the trade body UK Steel have expressed concerns that the high prices might perpetuate the exporting of scrap steel, rather than recycling it.

The price of electricity in the UK is rising at one of the fastest rates in Europe, particularly for industrial electricity, which is running as much as 60% higher than European competitors. There are fears that this could stifle attempts of the steel industry to achieve carbon net zero targets.

There have already been calls on the government to provide more help with electricity costs to boost steel recycling.  The British Metals Recycling Association (BMRA) raised concerns in May that the sector was already hampered by the loss of subsidised red diesel in April.

The UK currently produces around 11.3 million tonnes of scrap steel per year, of which only 2.6 million tonnes are recycled and resold within the UK. The rest is exported for recycling in Europe and further afield.

Although there is an established recycling process for steel in the UK, trade bodies are keen to boost rates, as the practice is more economical, greener, and more sustainable than selling scrap abroad, or manufacturing more steel products.

There are three methods used to recycle scrap steel. The first involves returning the by-products of new steel production straight back to the furnace to be remelted. The second involves selling the leftovers from the manufacturing of new steel products into the scrap metal industry.

Old scrap, which consists of products containing steel which have reached the end of their useful lives, needs to be processed before it can be re-melted. It could be anything from bridges and building materials, to cans and tools. Industry leaders are warning that recycling rates within the UK could plummet unless extra government help is made available.

Director general of UK Steel, Gareth Stace, said: “The challenges for the steel sector, therefore, are our existing high industrial electricity prices. These, which strangle investment, currently sit far higher than our European competitors.”

He added: “If a steel company is to invest in the costly transition to net-zero steel-making, we must ensure that the UK’s policy environment does not disincentivise but encourage it. We export much of our scrap steel only to reimport it, meaning there is fertile ground for electric arc steel-making.”

“The UK Government must work to establish a market for net-zero steel, supporting the emerging products and ensuring that UK steel-makers can compete in the short as well as the long term.”

He also criticised the current measures, saying that they were too slow, and could take years to have any meaningful effect or environmental benefit. He also reiterated fears that industrial electricity prices were too high, which will perpetuate the cycle of export scrap steel, and then re-importing it to make new products.


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