'Stuck on the starting line': Is the UK lagging behind Europe in the race for clean steel?

The UK is lagging far behind the rest of Europe in the race to decarbonise the steel industry, a study by the Energy and Climate Intelligence Unit (ECIU) has warned.

There are currently "no concrete plans" for producing steel using hydrogen in the UK and only "very vague proposals" for a single carbon capture-based project, according to the new analysis, which contrasted the sluggish progress in the UK with plans for 23 hydrogen-steel projects that are currently underway across the EU.

Decarbonising steel is a particularly pressing challenge for the UK as steel is the greatest industrial emitter due to the carbon-intensity of its production. The sector would need to find a way to decarbonise within the next 15 years if the country is to meet its emissions targets, Climate Change Committee modelling indicates. Nor will the need for steel abate, according to the ECIU, as railways, wind turbines, and nuclear power stations - core elements of a green national infrastructure - all require vast amounts of the material.

ECIU's head of analysis, Dr Jonathan Marshall, said the "stark illustration of just how far and fast the UK is behind in the race to green steel should be a wakeup call both to ministers and the communities reliant on jobs in the steel sector".

"Long investment cycles mean that cutting emissions in hard-to-decarbonise sectors must be underway now," he added. "This is essential not only if we are to hit climate targets, but also if the UK is serious about creating jobs and industries that are fit for the future."

According to Marshall, the UK has "enviable resources" for producing clean hydrogen which could bring a raft of economic benefits to the UK, while also allowing the country to claim a stake in a "competitive global market".

But the report warned the UK is lagging behind Europe's progress on a number of fronts. It highlights examples of hydrogen steel projects currently in the works across Europe, including plans from Germany's Thyssenkrupp to produce 50,000 tonnes of 'climate neutral' steel a year by 2022 and ArcelorMittal's plans to deliver 600,000 tonnes by the same date. Underpinning these ambitious goals is Germany's recently launched hydrogen strategy, which is backed by €9bn in funding.

In contrast, the UK Clean Steel Fund, introduced in 2019 and backed by £250m government funding to support the development of new technologies and processes, will not begin to even allocate funds until 2023. Delays to the government's long awaited Hydrogen Strategy are also "not helping", the report said.

Falling behind the EU in green steel development is a risk to employment, the report argues, with the UK's steel industry supporting 33,700 workers - a figure that doubles when supply chain employees are considered. As such, the report called for urgent action to protect "a domestic steel sector struggling to attract investment and uncertain of its long-term survival".

Reinforcing the report's conclusions, Sweden's H2 Green Steel yesterday announced it had raised $105m in its first round of public funding, underscoring a "strong interest" in sustainable steel and its market potential.

"We've seen a tremendous interest, both from the industry, future customers and long-term investors, in our mission to bring down CO2 emissions to zero in the steel industry," said Henrik Henriksson, H2GS's CEO.