Britain’s steel industry hammered by climate change taxes
By Paul Homewood
Not only do carbon prices push up electricity prices, they are also extremely detrimental to energy intensive industry, such as steel:
Crippling climate change levies are forcing Britain’s steelmakers to cut production after a doubling in the cost of carbon emissions in just nine months.
Record carbon prices are making it “all but impossible to increase production competitively” once emissions permits have been used as steelmakers struggle to take on producers in less climate-friendly countries, according to UK Steel.
The industry group estimates that costs are increased by £175 for every additional tonne of steel produced above their free emissions permits, equivalent to around 30pc of current steel prices globally.
However, ministers have refused to intervene to ease the pressure on the steelmakers caused by the sudden and unexpected rise in climate costs.
Carbon prices on the UK’s emissions trading scheme have doubled to just under £90 per tonne of emissions since May 2021, ramping up the pressure on steelmakers already hit by high energy costs.
Gareth Stace, director general of UK Steel said: “The problem is so significant that some UK steelmakers are having to curtail production to suit when power prices are low enough to produce profitability.
“The price of carbon not only drives up the cost of producing steel here in the UK but also significantly increases the price of electricity.”
The British steel industry has been fighting for survival after being undercut on global markets by competitors, particularly from China.
Production has slumped from around 18m tonnes two decades ago to 7m today, which has meant heavy job losses at major steelmakers including British Steel and Tata Steel.
Earlier this month 3,000 jobs were put in jeopardy at Sanjeev Gupta’s businesses after HMRC issued winding up petitions against four subsidiaries of his Liberty Steel empire.
Mr Stace warned that the “long-term viability of UK steel production” will be undermined unless ministers act to reduce electricity and carbon costs to boost the sector’s competitiveness.
He added: “Steelmakers in countries with considerably lower carbon and electricity prices, both inside and outside Europe, have a significant competitive edge over steelmakers here in Britain.”
The UK launched its own post-Brexit emissions trading scheme (ETS) last year but carbon prices have increased from around £45 per tonne of emissions to £90 in less than a year.
Under the ETS, a ceiling is set for the amount of carbon emissions created in the UK and the limit is reduced over time. Every tonne of emissions generated by a covered business must be matched with an allowance.
The Government hands out free carbon allowances and companies can buy them at auction or trade with the permits on the secondary market.
This cap and trade scheme is deemed vital in cutting emissions but currently only covers energy intensive firms, the power industry and aviation.
With market carbon prices so high, steelmakers face high costs for every tonne of emissions emitted above their free carbon allowances.
Ministers have turned down the opportunity to ease the pressure on firms hit by high carbon prices. The Cost Containment Mechanism allows the Government to intervene but ministers stood by in December and January when it was triggered.
The steel industry contributed £2bn to the UK’s economic output in 2020, around 0.1pc of total GDP, and supports more than 30,000 jobs.
A spokesman for the Department for Business said: “We remain absolutely determined to secure a competitive future for our energy intensive industries, including the steel sector, and in recent years have provided them with extensive support..
“The UK ETS Authority is monitoring the market closely and remains prepared to take timely and proportionate action should the Cost Containment Mechanism be triggered”.
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NOT A LOT OF PEOPLE KNOW THAT 
Not 100% sure but I recall when examining our local hospital trusts accounts as a governor that the Hospital pays government £200,000 pa climate taxes, for using energy to deliver health care…..
Brian, this raises the question: Which government brought in this CC ‘tax’ on hospitals, and what would the clapping public make of such a tax?
The %age of GDP is irrelevant. If a modern country wants to remain independent it must have its own steel making capability. The UK is heading for total dependency on imports mainly from the Far East. In its own way its as bad a position as Germany’s with Russian gas.
Jim, I’m getting the feeling that there may well be a whole load of scrap (Russian) metal that we could import from Ukraine…. 😉
This is just nonsense. Unless you are talking about making very basic stuff, we cannot hope to have a sophisticated modern economy without substantial imports of all sorts of things. What you do is diversify your sources – the “Far East” is not Gazprom. Basic steel is a low value, low skilled commodity.
Sorry . . . less than 30 % of high school graduates get any University education. Shuffling the high polluting jobs off to China will NOT clean up the planet. If we had any brains our governments would pay 1/2 the costs of installing scrubbers and electrostatic precipitators and Nitrogen Oxide burners on those smokestacks an retain those Good Union Jobs for our own ‘Unskilled’ workforce. The Big Money would stay and increase our own GDP right here at home. Our own wealth accumulation from construction, maintenance and operations right here at home. Unless of course you do not understand basic economics . . . ?
Maybe you thing that all the less fortunate intellectually should ALL work in service and retail and struggle to put food on the table while meeting your subserviently needs . . .
Decadence. Governments choke off critical businesses, assuming everything will continue to be just fine.
Government in its totality doesn’t care about the steel business. All else is intrigue.
They don’t care that they don’t have any idea about the nation’s industry, its dependences and its critical place in the nation’s security.
They are too busy deciding on lavatory policy and NET Zero battle tanks.
They don’t care that they don’t have any idea about the nation’s industry, its dependences and its critical place in the nation’s security.
They are too busy deciding on lavatory policy and NET Zero battle tanks.
I take it everybody is familiar with the piece of research which was presented to the Government in 2019. It seems to form the basis of their Net Zero policy. Quite frightening and probably the longest economic suicide letter in history.
https://www.repository.cam.ac.uk/bitstream/handle/1810/299414/REP_Absolute_Zero_V3_20200505.pdf?sequence=9&isAllowed=y
On the VERY first sentence of the ‘Executive Summary’ they say;
‘We can’t wait for breakthrough technologies to deliver net-zero emissions by 2050. Instead, we can plan to respond to climate change using today’s technologies with incremental change. This will reveal many opportunities for growth but requires a public discussion about future lifestyles.’
So right there in the first sentence is an admission that current technology isn’t able to deliver the net zero target demanded by advocates.
So to push through with net zero anyway is as clear an example of ideology over pragmatism one could ever wish to see. On its own that’s an admission net zero is a material risk for UK plc and everyone living and working here.
It also states a public discussion about future lifestyles will be required. When and where was that held?!
Nowhere that I can recall, that’s for sure. And no, that fake ‘government engagement with the 100 or so people on the biased public forum most certainly wasn’t it.
What a racket this nonsense has become.
Paul, may I suggest you take a microscope to this document? It’s a gold mine of truly horrendous government proposals. There’s masses and masses of material in here for you to run your forensic mind over.
This is a great link provided by Mad Mike.
“Not only do carbon prices push up electricity prices they’re also extremely detrimental to energy intensive industry,such as steel”That’s the whole point-in the New World order no steel, no resources at all for the masses. They do intend to own it all & “climate change” is one of their many ways they plan to accomplish their goals.
It is an admission that the public still has power. They need to get the public to accept their own demise. Putting “the planet” ahead of the people is working.
The unintended consequence of Putin’s ‘war’ is that the West may, at last, wake up to the nonsense and state-wide destruction that NZC and ruinables will bring in its wake. Let’s hope the public wake up to it.
Not only industry. All those invented taxes and regulations are hurting ordinary people by making things more expensive even without the _additional_ tax at actual point of sale.
That’s a point nobody seems interested in. Various organisations have estimated the ANNUAL cost of regulation at £35 billion. That’s over £1,000/household.
And regulation has a serious knock-on effect in terms of costs because it reduces competition. Ten years of EU regulatory overreach has probably added a further £1,000/household because of that. So we could reduce the cost of living by a substantial amount at virtually no cost & with no effort just by reducing regulation.
The crazy thing is that the UK is no longer in the EU. Why do all those taxes and regulations still exist in the UK?
As always Paul you hit the jugular . . .
First, ALL imports MUST in future must meet ‘Maximum Carbon’ emission standards or . . . They become illegal to Buy, Sell or Trade. . . Then, Home grown industries would stand a chance. Today China processes over 60% of Global Base Metals . . . Who gives a sh!t about pollution there eh ? . . . Time to change that before they have us over the barrel on base metal resources like Russia does with oil and Gas.
It’s long overdue to put the ‘carbon pricing’ Gini back into the ‘Magic Bottle’ from whence it came ! Carbon trading is a one trillion dollar annual drag/ scam on the Western economies in an attempt to appease the environmentalist propagandists embraced so ardently by the western Media without justification or Scientific Validity. Please read the following for a more in-depth review of the ‘Carbon Trading’ scam . . .
https://www.academia.edu/71023588/Batteries_Renewable_Energy_and_EV_s_The_Ultimate_in_Environmental_Destruction
The future for starters, no steel, no aluminum, no petrochemicals, no cement, no building large structures, no basic industries, no heat, high food prices, no cars except elites, reduced public transportation, no flying to foreign destinations holidays, To sum up NO JOBS welcome to the new Built Back Better UK.
What we really need is, no Boris, no CCC lets make that all quangos, a Real Tory party,
All climate taxes are based on a lie. That CO2 causes global warming. As the warming stopped 20 years ago, yet CO2 is still rising, surely under any other circumstances, anyone deceiving the public in this way should be brought to court, charged with obtaining money under false pretences?
Quite right Mr. Jay,
Furthermore with 8 previous Warming Periods of which 5 were warmer than today and NONE were caused by CO2 . . . Why Now ?? What gives ??
https://www.academia.edu/49421861/CO2_Cradle_of_Life_on_Planet_Earth
Part of the plan. Eliminate heavy industry and the rest will follow and you get the added bonus of eliminating their ability to manufacture during times of need like disasters and war.
Net zero is part of the policies contained in the Climate change Act.
This Act was almost unanimously passed by our elected members of Parliament, we voted for this policy, which was part of every political parties manifesto.
All the power stations have been demolished and the gas supply infrastructure is quietly being allowed to life expire.
The self evident self destructive affects of the net zero policies makes very little difference to the implementation of the policy, and even a bright shiny new tank parked on the front driveway does not affect those who believe.
As is usual we have a quote from a government spokesman who says the complete opposite of what government actions are doing.
less climate-friendly countries — give us a break from this stupidity.
Couldn’t bring themselves to write ‘less stupid countries’
Mr. Olbbrew,
60% of Global of ‘Primary Commodities’ like steel, aluminum, copper and the rest are processed in China today. What brought this to be? Early Environmental legislation 30 years ago started this wave and it continues today! Every punitive tax, every controlling piece of legislation pushes more and more primary industries to ‘throw up their hands’ and get out of town.
If we were more supportive and helped pay for the scrubbers and electrostatic precipitators on the smokestacks here at home we might save some of these good paying jobs. The ONLY thing that taxation and legislation supported by ‘The Gig Green Propaganda Machine’ accomplishes is moving pollution somewhere else, out of site, out of mind. Global Pollution remains the same! You might like to read a little more about this if you are so inclined . . .
https://www.academia.edu/49676862/Social_Engineering_Environmentalism_and_Globalization_A_New_World_Order
My Thoughts . . .
The steel industry will be the first out the door to be followed by many other industries, especially given there is so much foreign ownership.
Anyone else seen the piece on the mounting problems for Siemens due to failing windmill production?
The IPCC cannot be considered to be serious representatives of the climate of the future when they do not allow any dissenting voice in their midst, a policy which is akin to the Kremlin agreeing to peace talks provided no one from the Ukraine is invited
Absolutely, No truer words could be spoken . . .
Reblogged this on Gds44's Blog.
The Irony of all this climate change stuff and the False Narrative exposed . . .
https://www.academia.edu/71023588/Batteries_Renewable_Energy_and_EV_s_The_Ultimate_in_Environmental_Destruction
This Must get out or we are doomed . . .
Reblogged this on boudica.us and commented:
H/T gds44