(Secretary of State for
Business, Energy and Industrial Strategy): Moving
to net zero greenhouse gas emissions for the UK economy requires
transformation across all sectors of the economy and
unprecedented levels of investment in green and low carbon
technologies. The UK is a world leader in clean growth and in
setting our ambitious, legally binding, target of achieving net
zero emissions across the economy by 2050 we have demonstrated
our commitment to maintain this position.
A vibrant steel sector is of vital importance to the UK economy.
The sector employs 32,000 people and supports up to a further
40,000 jobs through its supply chains. With longstanding
expertise in steel making, the UK is well positioned to
demonstrate international leadership in clean steel and realise
domestic growth and export opportunities in associated products
and technical knowledge.
Today, the UK steel sector is a significant source of emissions
contributing 15% to industrial greenhouse gas emissions. The
integrated steel works at the British Steel site in Scunthorpe
and the Tata Steel UK site Port Talbot are the two largest
industrial sources of emissions in the UK.
We believe the time is right to provide dedicated support to our
steel industry, to help put it on a pathway to decarbonisation in
line with our net zero commitments. As a signal of that support,
on 29th August, Government announced a £250
million Clean Steel Fund.
There are a range of different decarbonisation options for steel
production: switching to lower carbon fuels, including hydrogen;
industrial carbon capture; and energy and material efficiency. In
order to better understand the needs of the steel sector and
which pathways best meet our objectives we issued a call for
evidence alongside the fund’s announcement to inform its future
design. We will work with the steel sector and other stakeholders
to develop timelines for the fund and to identify how to maximise
the economic and environmental benefits of these decarbonisation
options.
Recognising that availability of low carbon hydrogen at scale is
a constraint to large industrial users considering fuel
switching, Government has also announced a new £100 million Low
Carbon Hydrogen Production Fund. The fund will support the
deployment of low carbon hydrogen production capacity and
encourage private sector investment. This could enable a pathway
to lower carbon steel production and support broader efforts to
reduce emissions across the energy system, including transport,
other industry, power and potentially heat in buildings. The
Government intends to consult on the shape of the Fund during
2020 with a view to launching the Fund for bids in 2021.
Together these funds will be a vital part of transforming UK
industry and allow us to seize the opportunities of clean growth,
which are at the heart of our modern Industrial Strategy.
