With electricity costs in the UK exceeding those in France and Spain, the steel industry association UK Steel has called on the government to pay attention to energy costs for the industry.
In the last three months, wholesale electricity prices in the UK have risen above the levels in France and Spain. It was emphasized that the electricity dependency of the British steel industry is increasing and that electricity demand will increase further with new technologies.
Especially with the transition to EAF (Electric Arc Furnace), electricity consumption in the sector is expected to double and this will increase costs. UK Steel warned that electricity costs in the UK could account for up to 180% of gross value added for steel producers operating in the sector.
While measures taken by the previous government have reduced some costs, British steelmakers still face high costs compared to their major competitors, UK Steel said. UK Steel said that affordable electricity supplies are needed for the British steel industry to remain competitive and to continue its decarbonization efforts.
In another development in the sector, Spanish steelmakers have also requested support from the government. It is noteworthy that the local metallurgical sector has stated that the emission reduction commitment is not feasible in the current circumstances. This highlights the importance of electricity costs and environmental constraints in the international steel industry.
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