PARLIAMENTARY DEBATE
Steel Industry: Decarbonisation - 29 June 2023 (Commons/Commons Chamber)

The Paris agreement made clear that the steel industry needs to cut emissions by 93% by 2050, and the Government recognise the vital role that the steel sector plays in our economy. The 2021 net zero strategy sets out our aim to make the transition to a low-carbon economy, and reaffirms our commitment to continuing to work with the steel industry on decarbonisation.

Hundreds of steelworkers gathered in Westminster yesterday to make absolutely clear their feeling that the Government are not doing enough, particularly in comparison with competitor nations, when it comes to investment in the transition to decarbonised steel. The numbers do not lie. The Government are also worryingly slow in introducing a carbon border adjustment mechanism. UK Steel has estimated that nearly 23 million tonnes of non-EU steel could flood the UK market if the UK fails to introduce its own carbon border adjustment mechanism at the same time as the EU in 2026. When will we see the Government stepping up and investing in green steel as is being done in competitor countries, and when can we expect the introduction of a British CBAM?

We have been supporting the steel industry, with more than £1 billion available in grants to help decarbonise the sector and the provision of more than £730 million to cover energy costs since 2013. The CBAM is clearly an issue for many countries, not just ours. We have just finished one consultation, and will produce a response in due course. A transitional reporting phase is due to start in October, with full introduction in 2026. The EU is still developing details about CBAM implementation, and has a consultation open on proposed reporting requirements until 11 July. I know that the hon. Member chairs the all-party parliamentary group for steel and metal related industries, and I urge him to ensure that all businesses express their views as strongly as possible. I think we are meeting on Monday to make sure that we can provide a substantial response.

I call the shadow Minister.

The Minister said that she recognises the vital role that steel plays in this country, but the UK is the only country in the G20 where steel production is falling. It is also the only G7 country whose Government do not insist on using domestically produced steel in defence contracts. Meanwhile, UK steel producers pay 62% more than their German counterparts for electricity. Labour’s £3 billion green steel plan will give our industry the bright future that other countries are offering their steel sectors. Labour believes in our steel; why do this Government not?

I am not sure where Labour Members will get the money to fund that programme of work. I have not even got to the end of reading this paper but they will probably U-turn by the time I do, so I am not sure how sensible it is going to be. We have provided more than £1 billion for decarbonisation, unprecedented support to help with energy costs, and just recently, there was fantastic news from Celsa, when it was able to repay a Government loan of £30 million that we provided to them, sensibly spending taxpayers’ money. There is and always has been support available. When it comes to procurement, it is absolutely right that we do everything we can to make sure that we have UK firms procuring UK steel.