UK-based trade association UK Steel has set out four priorities for the Autumn Budget as it seeks government support to strengthen domestic steel production and reduce the country's heavy reliance on steel imports.
The association is calling for action on industrial electricity prices, steel investment, the UK Carbon Border Adjustment Mechanism (CBAM) and domestic steel scrap processing. According to UK Steel, these measures could help rebuild the country's industrial base while allowing domestic producers to capture a greater share of future infrastructure and manufacturing demand.
Currently, UK steelmakers supply only 30 percent of the steel consumed in the country, while imports account for around 70 percent. The government has set an ambition to increase the domestic steel industry's market share towards 50 percent, making greater local production a central focus of UK Steel's Autumn Budget proposals.
Competitive electricity prices key for UK steel industry
Reducing electricity costs is the first of UK Steel's four Autumn Budget priorities. The association is calling for a wholesale electricity price rebalancing scheme designed to put UK steelmakers on a more competitive footing.
Competitive industrial electricity prices have been identified by UK Steel as necessary for improving the conditions under which domestic steelmakers operate as the government seeks to increase the industry's share of UK steel demand.
UK Steel seeks access to £2.5 billion investment commitment
UK Steel's second proposal is the establishment of a steel-specific investment fund that would unlock the government's existing £2.5 billion commitment to the steel industry. The funding would be used to support investment in new steelmaking capabilities, productivity improvements and decarbonization, according to the association.
Increasing investment capacity is part of UK Steel's wider push to enable domestic producers to supply a greater proportion of the steel required for future UK infrastructure and manufacturing projects.
UK CBAM should support domestic steel production
The association's third Autumn Budget priority focuses on strengthening the UK CBAM. UK Steel stated that the carbon border mechanism should be structured to support domestic steel production and investment, rather than creating conditions that could undermine them.
The association therefore wants the government to ensure that the implementation of the UK CBAM is aligned with its broader ambition to increase the domestic industry's market share.
Investment in domestic steel scrap processing also sought
The fourth proposal concerns the UK's domestic steel scrap supply chain. UK Steel is calling for incentives to encourage investment in domestic steel scrap processing, which would help steelmakers secure the high-quality scrap they increasingly require at competitive prices.
According to the association, improving access to processed scrap will become increasingly important for the UK steel industry's future requirements.
UK Steel targets shift away from 70 percent import dependence
UK Steel stated that its Autumn Budget proposals extend beyond direct support for steelmakers, arguing that a stronger domestic industry would contribute to investment, high-skilled employment, stronger supply chains and economic growth across the country.
With imports currently satisfying around 70 percent of UK steel demand, the association believes the appropriate policy framework could enable domestic steelmakers to produce a substantially larger proportion of the country's requirements and move towards the government's 50 percent domestic market share ambition.
UK Steel described steel as one of the foundations of the country's proposed reindustrialization, highlighting the role domestic production could play in retaining more of the value generated by future infrastructure and manufacturing investment in the UK.
