Steel Industry: Contribution to the UK Economy

Tim Farron Excerpts

Wednesday 25th January 2023 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is an honour to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Newport East (Jessica Morden) and all those who have contributed in this important debate.

I will focus on the role of steel in making Britain a sustainable economy. Steel plays a massively significant role in our ability to extend the railways, to ensure we have the green technology to build zero-carbon homes, and to make best use of the natural resources in this country—wind and particularly hydro power, which I will talk about in a moment. But while it is vital to the greening of our economy, we cannot ignore the fact that steel produced with coal is a major contributor to climate change. The steel industry contributes 5% of the EU’s carbon emissions and 7% of global carbon emissions, equivalent to the entire aviation industry. To cut to the chase, the good news is that the amount of steel produced using coal is now down to 70% and that produced by renewable means, in particular using electric arc furnaces, is up to 30% and rising. Increasingly, customers for steel are demanding that it be produced in green and renewable ways: for example, Volvo is now committed to building 100% of its trucks in a fossil-free environment.

I make these remarks because of my engagement with a great controversy in my county of Cumbria, where the Government recently gave the green light to the first coalmine for 30 years, ostensibly to support the steel industry. It is clear that 83% of the coal produced by West Cumbria Mining will be exported and not support the UK steel industry. Both Tata and British Steel have been clear that they have no plans to make use of that coal. British Steel has been clear that it is the wrong sort of coal with the wrong sulphur content, so it will be next to no use whatever to the production of steel.

Numerous people, including the hon. Member for Newport East, have mentioned the Government’s recent comments about the green switch and supporting Tata with £600 million to help move towards electric furnaces. Perhaps we will hear more detail from the Minister. Tata says that it will cost £3 billion. We also know that Salzgitter in Germany, which produces about as much steel as the entire British steel industry produces in a year, will be completely fossil-free within 10 years, so my fear is that we are not being ambitious enough.

Steel is utterly vital. I think about my constituency, where we need a passing loop on the Lakes line to dual the capacity of the railway line that takes people to Britain’s second busiest and biggest visitor destination after London. We desperately need zero-carbon affordable homes, and we need steel for that, too. We need to make more use of wind, and although the British Isles have a higher tidal range than any other country on planet Earth apart from Canada, we are using next to none of it, and steel is vital to the wind turbine and the wave turbine. The barrage is another way in which we could make use of tidal and wave power.

Steel is vital to our green economy. As Britain decarbonises with new infrastructure based on steel, let us make sure that we also decarbonise the processes we use to make that steel.