“Greening” Britain’s steel industry could cost 25,000 jobs and £6billion, an expert revealed today.
Firms are under pressure from the Government and campaigners to slash carbon emissions generated during production.
Companies say they want to become more environmentally-friendly but fear measures could make their metal more expensive compared with cheap foreign imports from countries with less tough rules and targets.
Materials Processing Institute chief executive Chris McDonald spelt out the cost in a briefing for MPs and peers on Westminster’s All-Party Parliamentary Group on Steel.
Calling for a “strong, resilient and zero-carbon steel sector”, he said that “achieving these aims will require investment and innovation in the steel and wider metals sector”.
“We know that the steel industry is the largest industrial emitter of carbon dioxide and so measures to reduce emissions will require a wholesale change in the technology of steel production,” said Mr McDonald.
“Fortunately we already know what the technologies to decarbonise will be and they are a combination of electric arc furnaces, hydrogen and carbon capture and storage.
“I estimate the cost of adopting these technologies is around £6bn for the UK steel industry, in addition to associated infrastructure.
“This is not a huge some of money in the context of steel.”
Mr McDonald called for greater use of robots and digitisation – but admitted the move would trigger job losses.
He claimed steelworkers “understand the impact and importance of productivity improvement”, citing figures showing the industry has lost 90% of its staff since the 1970s.
He admitted: “The latest technologies available have the potential to reduce this by a further 80% – or four in five jobs.”
Britain’s steel sector employs 32,000 workers and an 80% fall in employment would leave just 6,400 – with 25,600 forced out.
Community union operations director Alasdair McDiarmid vowed to resist “hard” redundancies and warned: “Steelworkers must not pay the price for a zero-carbon strategy.”
But he conceded it was “likely less labour will be required in the upstream steelmaking operations we see today”.
Any transition to meet carbon emission targets “must take place over a realistic timescale”, allowing workers to retire or leave the industry “through natural attrition”, he said.
He admitted there would be “disruption and upheaval” for staff, saying: “The world has changed, the conversation on climate change has moved on, we have new legally-binding targets and our members recognise we’re not going to be able to continue as we are over the long term.”
Mr McDiarmid added: “The unions know the sector has to decarbonise and we don’t shy away from that.
“In fact, we believe we need to get on with it and commit now to a long-term strategy, because that’s what our European competitors are doing and because it’s the only way to secure the future of British steelmaking.”
Judith Kirton-Darling, of European trade union group IndustriALL, said: “There is massive anxiety for steelworkers across Europe about on the one hand the challenges of the mega-trends – decarbonisation, digitalisation – but also the intense globalisation the sector faces, intense competition.”
It comes as ministers prepare to relax measures aimed at protecting the sector from cheap foreign imports.
The industry is also under the spotlight as the countdown to the COP26 climate summit in Glasgow intensifies.
APPG chairman Stephen Kinnock, a Labour MP whose Aberavon constituency includes Britain’s biggest steelworks at Port Talbot, said the industry was “at a tipping point” and faced “an existential moment” as it grappled with the riddle of “how do we decarbonise without de-industrialising?” he said.
“The Climate Change Committee has suggested that CO2 emissions connected to steel production should be near zero by 2035, so that’s an incredibly challenging target.”
Roz Bulleid, of the Green Alliance, called for the UK to focus on recycling steel, which uses less-polluting electric arc furnaces.
She said: “We export more scrap than we produce steel while importing high-value products made with electric arc furnaces made by other countries, like Turkey.
“We could be capturing much more of that value from the scrap here.”
The Mirror has been campaigning to Save Our Steel since the industry was clobbered by plant closures and thousands of redundancies in 2015.