UK Steel, the leading trade association for the British steel industry, has welcomed the UK government’s new Industrial Strategy, which aims to cut industrial electricity costs and boost the sector’s global competitiveness.
The strategy incorporates three major policy recommendations from UK Steel, signaling stronger alignment between industry needs and government planning:
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Raising Network Charging Compensation from 60% to 90%, saving UK steelmakers an estimated £14.5 million annually. This brings UK support in line with levels seen in Germany and France.
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Retaining indirect carbon cost compensation, which offsets the burden of carbon taxes passed through electricity bills, helping ensure steel producers remain viable in a decarbonizing economy.
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Introducing a British Industrial Competitiveness Scheme from 2027, which is projected to reduce power prices by up to £43/MWh for eligible manufacturers.
While UK Steel praised these steps, it also highlighted ongoing challenges. Despite expected cost savings, UK steelmakers still face a £10–16/MWh electricity price gap compared to their European rivals. This adds roughly £36 million a year to steel production costs in the UK.
The association attributed the persistent cost disparity to higher wholesale electricity prices, largely driven by the UK’s continued reliance on natural gas-based power generation.
UK Steel emphasized the importance of addressing these structural issues to ensure the long-term competitiveness and sustainability of British steelmaking.
VietnamSteel by Hoa Sen Group
