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Gov’t to consider £250m Clean Steel Fund to support industry
The Government has announced it is seeking views on the £250 million Clean Steel Fund, which will support the UK steel sector to move to a decarbonisation pathway compatible with net-zero.
Led by BEIS, it will ask for supporting evidence from industry to help develop a detailed design of the fund, including barriers to realising clean steel ambitions, and the opportunities to be gained in overcoming these.
The £250 million Clean Steel Fund will support the UK steel sector to transition to lower carbon iron and steel production through new technologies and processes, placing the sector on a pathway that is consistent with the UK Climate Change Act (net zero). It will also aim to maximise longevity and resilience in the UK steel sector by building on longstanding expertise and skills and harnessing clean growth opportunities.
The Government has announced plans for a £250m Clean Steel Fund to support the UK steel industry / Picture: Getty/iStock
It a statement BEIS also confirmed its intention to establish a new £100 million Low Carbon Hydrogen Production Fund, to support the deployment of low carbon hydrogen production at scale, which could enable a pathway to lower carbon steel production and support broader efforts to decarbonise industry.
Gareth Stace, UK Steel Director General, said: “Today’s announcement of the Clean Steel Fund is extremely positive news for UK steelmakers and the whole of the UK’s decarbonisation efforts. The fund is a vital step towards further reducing our carbon footprint here in the UK and will cement our position in a future low-carbon world.
“Recent years’ Government policy of carbon taxation and renewables funding has added costs to steel production through higher energy bills. As steel is an intensively traded product, this has had a negative impact on the sector’s competitiveness and leads to fears that we are exporting steel production, its jobs, and emissions, rather than lowering emissions at home.
“It is crucial that the Clean Steel Fund is designed in a manner that can be best used by the steel sector and make maximum use of funds allowed by state aid. This is not a time to be too cautious, as UK steelmakers face an uncertain business environment. The Government needs to move swiftly to secure a bright future for the sector while addressing the elements which undermines our competitiveness.”
The UK Steel Sector in Numbers
• Produces 8 million tonnes of steel a year, around 80% of the UK’s annual requirement
• Employs 32,000 people directly in the UK and supports a further 52,300 in supplies chains and local communities
• The average steel sector salary is £36,000, 28% higher than the UK national average and 46% higher than the regional average in Wales, and Yorkshire & Humberside where its jobs are concentrated
• Makes a £1.6 billion direct contribution to UK GDP and supports a further £3.9 billion
• Makes a £3.2 billion direct contribution to the UK’s balance of trade
• 96% of all steel used in the UK is recovered and recycled to be used again and again