The government’s emergency takeover of British Steel has many blaming Labour’s own “Net Zero” policies for the current crisis – but is that accurate?
MPs were rushed back to parliament in the middle of their Easter recess on Saturday to pass an emergency law to prevent the last steel-making site in England from going under.
The government is now looking to nationalise British Steel amid fears its Chinese owner Jingye was planning to run it down.
Talks aimed at providing government support to help prop up the loss-making site collapsed, forcing ministers to step in to maintain its steel-production capacity and save the jobs of around 3,000 workers.
Critics are now blaming the UK’s eco-friendly policies for driving Scunthorpe to the brink – a claim environmentalists say is inaccurate.
Here’s what you need to know.
How have green policies affected the raw materials British Steel needs?
The Scunthorpe site is the last maker of virgin steel in the UK and needs iron ore and coke, which is a derivative of coal, to keep its two blast furnaces going. If the furnaces shut down, it is very difficult – and expensive – to get them operating again.
Scunthorpe usually imports its coking coal, which can take 45 days to arrive once it’s been ordered.
Critics have subsequently started to attack the government’s reluctance to open new coal mines, saying they could have provided some of the raw materials needed for Scunthorpe.
Actually, Labour had been willing to go ahead with a coal mine in Cumbria, because that was given the go-ahead under the previous government.
However, that plan fell apart recently after a mining firm withdrew their plan to develop the site.
Even if another buyer had been found, the coke developed on this site would have contained too much sulphur to be used by British Steel.
Most of the material needed for the Scunthorpe workers would have to be imported anyway.
The Cumbria coal mine’s own operator also previously acknowledged 85% of its coal would have to be exported.
And, as the Climate Change Committee warned in 2021, “coking coal should only be used in steelmaking beyond 2035 if a very high proportion of the associated carbon emissions is captured and stored”.
Are coal mines banned under green legislation?
The government has not actually banned coal production in the UK yet.
It wants to bring forward the plans blocking such new coal extraction, but has not put a time frame on when it intends to do so.
As energy security and net zero secretary Ed Miliband said in November: “The measures we will bring forward, when timing allows, mean we will be one of the first countries in the world to ban new coal mines.”
Is green energy making it too expensive to produce steel?
Jingye has claimed the blast furnaces at the Scunthorpe plant are “no longer financially sustainable”.
Many have subsequently blamed the UK’s bid to produce green steel for that increased price rise.
But wholesale electricity costs are actually the largest part of what makes up industrial electricity prices.
The cost of gas drives electricity prices 98% of the time in the UK, according to Carbon Brief.
Similarly, UK Steel said: ”The main driver of the price disparity is now wholesale electricity costs, driven by the UK’s reliance on natural gas power.”
The prime minister’s spokesperson told reporters: “The UK has had a higher exposure to gas, which is why consumers and businesses have borne the brunt of President Putin’s invasion of Ukraine.”
He added: “The drive to net zero will bring down bills.
“It’s about providing energy independence here in the UK so that we’re not affected by foreign dictators pushing up the global price of energy.
“Being at the forefront of this energy of the future will drive growth and create jobs.”
It is also worth comparing the “policy costs” in the UK to its European counterparts who have similar green policies in place. Britain’s are much lower than in both France and Germany.