Concerns have been expressed by the steel industry that more jobs may be lost before any government assistance for electricity costs.
Gareth Stace, director general of industry body UK Steel, thinks British Steel’s 260 job cuts could start a trend.
Beginning next year, the government intends to reduce electricity costs for energy-intensive industries.
For businesses that produce steel, paper, and chemicals, electricity costs have skyrocketed.
According to the government, the proposed changes would bring the energy costs of the UK’s energy-intensive industries in line with those charged in other important economies.
The modifications would exempt some 300 companies, employing 400,000 people, that manufacture steel, paper, chemicals, and other metals from certain costs and taxes.
The support would allow those industries to “remain competitive on the global stage.” According to Commerce and Trade Secretary Kemi Badenoch.
Steel production costs have increased due to rising energy prices.
According to UK Steel, steel manufacturers in Britain pay approximately 60% more for electricity than their counterparts in other countries, such as Germany, due to added tariffs and carbon costs.
Mr. Stace applauded the government’s proposals, stating that they would “go a long way” towards bridging the disparity between the prices paid by UK steelmakers and EU competitors.
He said the time needed to execute them was “particularly concerning,” with spring consultations.
We might see our electricity prices going down in just over a year – well. Just over a year is a long time in steel,” he told.
He feared that without a “competitive business environment” for the UK steel sector. The investment would decline and more announcements similar to British Steel’s could be forthcoming.
British Steel announced on Wednesday that it would close its coking ovens in Scunthorpe and eliminate up to 260 positions. The Chinese-owned company cited “unprecedented” increases in energy costs as the cause.
Unions viewed the decision as a worrying sign for the future of the British steel industry.
The new proposals follow the government’s decision to extend the Energy Intensive Industries Compensation Scheme for an additional three years. The program offers businesses relief from certain electricity bill expenses.
