British steelmaking won’t survive Net Zero
The transition to eco-friendly steel is already threatening thousands of livelihoods.
Lo and behold, the real cost of Net Zero. Last weekend, roughly 400 workers from the steelworks in Port Talbot, Wales marched in protest against the prospect of up to 3,000 redundancies. Earlier this year, Tata Steel, the Indian owner of the Port Talbot factory, struck a deal with the UK government – it would receive £500million for switching to ‘greener’ methods of steel production. And that means redundancies.
Port Talbot’s two low-productivity, high-CO2 emissions blast furnaces are to be switched for a high-productivity, low-CO2 electric arc furnace (EAF). With this transition, 3,000 of the plant’s 4,000 jobs may become obsolete.
The picture is similar over at Tata’s rival, British Steel. The Chinese-owned British Steel has begged for £600million of government support to replace its two blast furnaces at Scunthorpe in Lincolnshire with EAFs. British Steel, which is currently haemorrhaging around £30million a month, will shed perhaps 2,000 of the 3,200 jobs at Scunthorpe.
Both Tata and British Steel have justified their redundancies in terms of reaching Net Zero by 2050. And while it’s true that the Port Talbot plant is the UK’s biggest single carbon emitter, this needs to be put into perspective. Replacing the blast furnaces in Port Talbot would cut UK carbon emissions by just 1.5 per cent. Given that Britain emits just one per cent of global CO2 each year, an EAF at Port Talbot would reduce the world’s CO2 quotient by a grand total of 0.01 per cent.
In any case, even if transitioning to EAFs would make a huge dent in global emissions, would it be worth it? Probably not. Like so many green technologies, EAFs are not a direct substitute for the technology they seek to replace. They rely on scrap steel rather than iron ore for their input, and therefore aren’t ideal for making the ‘virgin steel’ that car-making and most other industries require.
EAFs are prone to other snags, too. They can’t handle electricity blackouts, which is worrying given Britain’s ill-advised decision to rely on intermittent and unreliable wind power. And they’ll be vulnerable to increases in electricity prices, which are only likely to worsen with the drive to Net Zero.
EAFs also use electrodes made of graphite. The trouble is that more than 90 per cent of the world’s graphite is refined in China. And last month, the Chinese Communist Party (CCP) imposed export permits for some graphite products on national-security grounds. Prices for graphite are therefore likely to rise. And it will be 10 or 20 years before the West is able to produce anywhere near as much graphite synthetically.
Of course, none of this matters to our eco-obsessed elites. The unachievable goal of Net Zero trumps all other considerations.
Business secretary Kemi Badenoch has tried to present the ‘transition to sustainable steel’ as some sort of win for Britain’s ‘economic security’, ‘resilience’ and ‘sovereign capability’. But a government document on ‘securing’ the future of Welsh steel concedes that there will be job losses. In a footnote, it tries to reassure any workers ‘affected by the proposals’ that they will have access to Universal Credit and retraining through Job Centre Plus.
The UK government clearly has very little interest in boosting the steel industry or in supporting the people who depend on it. Funding for research and development into steel processes and products is so miniscule as to be basically worthless. Besides, almost all of this research funding, whether it comes from the private sector or the state, is skewed towards making greener steel, rather than on improving the productivity or competitiveness of our steelworks.
The UK appears to have given up on steel. If steelmaking is to have a future, we will need to put an end to the elites’ Net Zero delusions.
James Woudhuysen is visiting professor of forecasting and innovation at London South Bank University.
Picture by: Getty.
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