Steel Industry News – Late February 2025
Estimated reading time 2 minutes
Britain’s steel industry has warned that it faces more than £150mn in annual costs under government plans to phase out allowances that allow manufacturers to emit greenhouse gases for free.
Ministers plan to wind down carbon allowances over 10 years from 2027, in what the sector called an “earthquake moment”.
UK Steel, the industry trade lobby group, has warned ministers that the sector could face annual carbon costs as high as £167mn by 2037 — the expected end of the phaseout period — depending on the price of carbon.
British steelmakers are being backed today by the Government as the Business Secretary launches the Plan for Steel Consultation.
This will look at the long-term issues facing the industry like high electricity costs, unfair trading practices, and scrap metal recycling – to protect jobs and living standards in the UK’s industrial heartlands. Up to £2.5 billion will be put towards supporting the steel industry, as per the manifesto commitment, including via the National Wealth Fund. This could benefit regions across the UK – like Scunthorpe, Rotherham, Redcar, Yorkshire, and Scotland – which have a strong history of steel production. It will be spent on initiatives that will give the industry a long future – such as electric arc furnaces, or other improvements to UK capabilities
Tata Steel’s bid to build a £1.25bn electric arc furnace at its Port Talbot steelworks has been given the go-ahead by planners. Neath Port Talbot planning committee approved the company’s plans to begin construction in the summer, with the furnace expected to be operational by early 2028.
In its planning application Tata Steel said it had lost £4bn in Port Talbot since 2007 and the new furnace would create a “financially and environmentally sustainable” business.
Tata Steel has already appointed contractor Sir Robert McAlpine to deliver the project, which will involve the demolition of existing structures and partially filling an on-site lagoon. New buildings to be constructed will include the furnace complex, a fume and dust treatment plant and a water treatment facility. A scrap processing plant will also be required.
