The UK-based trade association UK Steel has proposed the development of a new mechanism to tackle the uncompetitive electricity prices that the UK steel industry faces—prices that are up to 50% higher than those in Germany and France. In its proposal, UK Steel emphasized the need for new policy solutions to ensure affordable energy, maintain industry competitiveness, and strengthen the UK's steel production capabilities.
UK Steel's proposal aligns with strategies adopted by other steel-producing countries such as France, Italy, Spain, and the UAE, which have implemented mechanisms to shield energy-intensive industries from high wholesale electricity prices. The proposed mechanism aims to:
- Provide price parity with the lowest-cost European competitors by fixing electricity prices for the steel sector, enhancing global competitiveness.
- Protect against price volatility, which will allow long-term planning and investment in low-carbon technologies, such as electric arc furnaces.
- Share risk and reward by ensuring that the steel sector pays back the government when electricity prices fall below an agreed strike price.
UK Steel highlighted that this proposal is a practical and future-focused solution to support the UK steel sector and accelerate its green transition. The association stated that the proposed mechanism is vital for the success of the UK government’s Steel Strategy, as it aims to create a more competitive business environment for the steel industry, attract investment, and enable broader decarbonization efforts across the sector.
By introducing this mechanism, UK Steel believes it will not only help steel producers thrive in a competitive global market but also contribute to the UK’s sustainability goals.
VietnamSteel by Hoa Sen Group
