Steel Sector Efforts to Cut Emissions Hampered by High Power Costs

SEATTLE (Scrap Monster): The latest report published by trade association UK Steel noted that higher power prices in Britain, compared to other European countries, have hampered efforts by the steel sector to cut carbon emissions.

The report said that British steel producers have to pay 61% more for electricity, compared to what rivals pay in Germany. Also, the electricity charges are 51% more than that in France. The gap between electricity prices paid by the UK steelmakers and steelmakers elsewhere in the European region has almost doubled in 2020.

The decarbonisation efforts demand investment in new highly electricity intensive equipment. The prevailing high power costs in the UK will hamper such investments. The conversion of UK’s coal-powered blast furnaces to hydrogen-based steelmaking could boost electricity consumption by 250%, whereas the conversion to electric arc furnaces would result in 150% surge in electricity consumption, the report noted.

The UK Steel report called upon the British government to implement reductions in power costs, similar to those implemented by the governments in Germany and France, so as to help the industry achieve reduced carbon emissions.

As per studies, global steel industry is one of the main contributors of carbon emissions, accounting for almost 11% of the total global emissions.