UK Steel Slams Budget for Failing to Tackle High Electricity Costs for British Steelmakers
By Ian Williams, manager
updated:
British steelmakers are moving towards electric arc furnace (EAF)-based production and other lower-carbon technologies. Because these technologies use more electricity, high power costs pose an especially serious challenge. UK Steel, the UK steel industry association, said it was disappointed that the government’s latest budget included no measures to address these persistently high costs. Electricity prices for UK steel producers are currently 49 percent higher than those paid by competitors in France, adding £66 million to the industry’s costs this year, UK Steel said.
UK Steel Plan Could Narrow Power Price Gap
UK Steel said that ongoing instability in the Middle East has coincided with a recent surge in wholesale energy prices, which are now approximately three times their February levels, leaving British manufacturers even more exposed to volatility in international gas markets.om 2026 to 2030.
UK Steel also highlighted the recent increase in wholesale energy prices amid continued instability in the Middle East, noting that prices have risen to approximately three times their February levels. According to the association, this development has further exposed British manufacturers to volatility in international gas markets.
UK Steel Calls for Cheaper Power
To support domestic steel production, attract investment, and accelerate the transition to lower-carbon steelmaking, UK Steel has urged the government to collaborate with the industry on securing more competitive electricity prices. The organization also recommended revisiting the proposed price-rebalancing mechanism, emphasizing that the extra energy costs currently borne by UK steelmakers could instead fund new equipment, skilled jobs, and industrial decarbonization.
UK Steel has called on the government to reconsider the proposed electricity price rebalancing mechanism and work with the industry to establish more competitive electricity prices, supporting domestic steel production, investment and the transition toward lower-carbon steelmaking.