UK Steel sector calls on Government to unlock multi-billion pound opportunity in procurement reforms

To provide a policy blueprint for the Government's Steel Strategy, UK Steel has today published a new report, Public Procurement of Steel: Time for new thinking for a thriving industry. The report contains a range of proposals to improve the uptake of UK-made steel in taxpayer-funded projects.

This new report highlights the opportunity for the Government, as the single biggest purchaser of steel in the UK, to further support its steel sector by procuring the steel it buys from UK steelmakers rather than buying steel from abroad.

As the largest buyer of steel in the UK, the Government has a unique opportunity to support the domestic steel sector. However, the latest data reveals that one third of the steel it procures is imported, costing UK taxpayers £1.5 billion annually rather than supporting UK steel producers. Over the next decade, government steel requirements will exceed £4.3 billion without even accounting for major initiatives such as carbon capture and storage, hydrogen infrastructure, nuclear energy, and offshore wind.

£21bn offshore wind opportunity

To shine a light on these missing sectors in Government figures and to show the real opportunity for both the Government and the British steel sector, UK Steel commissioned an independent report from LumenEE to identify the total steel needed for the rapid expansion of the UK's offshore wind sector, out to 2025.

Offshore wind experts LumenEE estimate that up to 25 million tonnes of steel will be needed in the next 25 years for offshore wind investment around the coast of Britain. This single opportunity alone is worth approximately £21 billion in steel purchases. This case study in just one sector shows the massive opportunities for the UK industry across the wide metals supply chain if there was a supportive procurement policy environment.

Recommendations to prioritise domestic steel

To ensure that taxpayer money stops being spent on importing foreign steel for major infrastructure projects, UK Steel today is setting out five key recommendations to ensure that, where reasonably possible, steel made here in the UK stands at the front of the queue when Government is making purchasing decisions on steel. A change in culture is needed to reap the benefits of government-funded steel procurement. To do this is a win for the Government, for the UK steel sector and for the highly skilled, well-paid jobs that our sector provides. Buying steel from abroad is letting taxpayers' money leave our shores, where it could be better spent here, turning our sector around and building the UK economy.

Change is clearly needed so that offshore wind demand and the ways it can drive growth for the steel sector and the UK are built into the forthcoming Steel Strategy. Data gaps should be filled to better plan for projected demand in other key markets and evaluate disparities in national steelmaking capacity and capability to meet these needs.

Better data and a full understanding of the challenge will shape the much-anticipated Government Steel Strategy and ensure the Government can strategically invest its £2.5 billion National Wealth Fund share earmarked for our sector.

Key recommendations to boost domestic steel purchases include:

1. Public Procurement Contracts: The UK Government should use the contribution our steel industry makes to national security to mandate or incentivise the use of UK-made steel, where possible, for projects of energy, defence, and related infrastructure via domestic content stipulations in contracts where public funding or subsidy is involved utilising World Trade Organisation (WTO) opt-outs.
2. Contracts for Difference (CfDs): In future auctions, the Government should evaluate the bidders' contributions to sustainability, resilience, and local content, with these criteria applying to at least 30% of the volume auctioned annually, as the EU is currently implementing without challenge in its Net Zero Industry Act.

3. Nationally Significant Infrastructure Projects: These should be required to adhere fully to the Procurement Policy Note for Steel⁵ and, given their criticality for our economy, be subject to local content requirements of not below 30%.

4. Procurement Policy Note for Steel (PPN): The existing PPN should be strengthened to require developers and public bodies to justify why they did not use UK-made steel, if it was available, and require a mandatory consultation of the forthcoming UK Steel Digital Catalogue.

5. Investment in steel supply chains: A public-private partnership should drive investment into steel supply chains, which will attract inward investment, create jobs, drive economic growth, and ensure the UK develops resilient supply chains in the face of uncertain geopolitics.

UK Steel Director-General, Gareth Stace, said:

“The UK steel sector stands ready to partner with the Government to build a strong Steel Strategy that prioritises homegrown production. Strategic procurement can transform taxpayer investment into a win for the economy, safeguarding well-paid jobs and revitalising our industry.

“The LumenEE findings on offshore wind alone illustrate what's at stake: £21 billion in steel purchases that could drive a major upturn in UK production. Without decisive action, we risk losing this opportunity and continuing to fund foreign competitors instead of our own economy.

“Incorporating our recommendations into the Government's Steel Strategy will not only reduce reliance on imported steel but also position the UK as a global leader in green and resilient supply chains. By addressing data gaps and planning for future demand, the UK can ensure its £2.5 billion National Wealth Fund fuels a thriving steel sector that meets the challenges of a net-zero future.”

Dan McGrail, CEO of RenewableUK, said:

“UK Steel's report, and work produced by LumenEE, could not be more timely. The technical findings illustrate the components our sector will need for the next quarter of a century and work in lockstep with the template set out in the Industrial Growth Plan paper.

“This is the first time that the offshore wind sector's technical steel requirements have been laid out for Government, the renewable industry and suppliers to see, component by component. If the Government and steel industry carefully invests the £2.5bn steel fund in response to this huge growth area, then the wind industry's Industrial Growth Plan, UK steel production, fabrication and national supply chains can all fall into step as a huge economic boon for the UK.”

Offshore Wind Growth Partnership Programme Director, Anil Sayhan, said:

“The Bill of Works is a pivotal resource in defining the offshore wind industry's steel requirements. The report fulfils a key Industrial Growth Plan action and identifies a 25 million tonne opportunity to supply UK offshore wind farms.

“We look forward to working closely with steel manufacturers and fabricators to help them capitalise on the significant opportunities presented in the Bill of Works to foster a stronger UK supply chain.

“OWGP is deeply committed to advancing a sustainable, robust, and competitive UK supply chain. We extend our thanks to UK Steel for publishing this insightful report and for inviting us to contribute our expertise through the Bill of Works advisory board."

Jonathan Clemens, CEO, British Constructional Steelwork Association, said:

“The British Constructional Steelwork Association (BCSA) membership represents structural steel fabricators and the associated supply chain. Our membership must attain the coveted Registered Quality Steelwork Contractor (RQSC) assessment by demonstrating a professional approach to all aspects of their businesses and providing fabricated steel solutions that last.

“The BCSA believes this to be an important report detailing a way in which the UK Government and industry can work together and align to provide skilled jobs over the next three decades through a UK-based supply chain providing a vital more sustainable energy source and a greener economy. BCSA membership represents the highest standards in quality and competence with respect to fabricated steel for the construction industry and civil engineering projects, with the offshore market proving to be an area for growth and investment.”

Community Assistant General Secretary Alasdair McDiarmid said:

"UK Steel's new report lays out practical steps the UK Government can take on procurement to ensure that Britain buys more of its own steel, providing value to the taxpayer whilst safeguarding our strategic industry and jobs for the future. The recommendations put forward to reform processes for awarding public contracts, maximising the use of locally-sourced steel and updating national procurement guidance, are all common-sense measures which the government could adopt swiftly.

"We also endorse the accompanying LumenEE report, which rightly highlights huge opportunities relating to Britain's unprecedented future investments in wind turbine manufacturing. This is the kind of transformational investment we have been calling for over many years, and has enormous potential to strengthen UK supply chains and deliver high quality jobs right across the country.

"As the LumenEE report references, the proposed investments in wind power infrastructure support a powerful case to invest in Britain's capacity to make the steel  the industry will need. This is a massive opportunity to create a prosperous end-to-end green domestic supply chain, and to harness the capabilities that already exist in UK steelmaking.

"Investing in green infrastructure is essential for our economy and our planet, and it cannot be delivered without a strong and sustainable British steel industry. That's exactly why we need to use steel produced here in the UK to green our economy and bring jobs to our communities."

Contact Information

Louise Young
Campaigns and Engagement Manager
UK Steel
07388 370176
lyoung@makeuk.org

Notes to editors

• The reports can also be downloaded on https://www.uksteel.org/procurement 

The UK steel sector: 

• Produces 5.6Mt of crude steel a year, equivalent to 70% of the UK's annual requirement (annual demand of 7.6Mt in 2023, of which 40% was met by domestically produced steel) 
• Employs 33,700 people directly in the UK and supports a further 42,000 in supply chains  
• The median steel sector salary is £37,315, 26% higher than the UK national median and 35% higher than the regional median in Wales, Yorkshire, and Humberside, where its jobs are concentrated  
• Directly contributes £1.8 billion to UK GVA and supports a further £2.4 billion  
• Directly contributes £3.4 billion to the UK's balance of trade 96% of steel used in construction and infrastructure in the UK is recovered and recycled to be used again and again. 

For further information about the steel industry, please see the UK Steel Seven Opportunities for Steel report, 2024 press pack, Why the UK needs a strong steel sector or the 2024 UK Steel Key Statistics report. 

Government spend analysis:

• Based on DBT Steel Procurement Pipeline: Steel public procurement 2024 - GOV.UK, showing 8Mt of steel is estimated to be required for infrastructure projects over the next decade and assuming an average price of £540/t.

Steering group:

• The Bill of Works, produced by LumenEE, was evaluated by an expert Advisory Panel, including steel fabricator trade association BCSA, the Crown Estate, Crown Estate Scotland, DBT, DESNZ, the Offshore Wind Growth Partnership and RenewableUK.

Key stats from ‘Bill of Works'

Offshore wind industry:

• The UK is the world's second-largest offshore wind market after China.
• The UK has 14.1GW of offshore wind operational, with a further 6.3GW in construction and 23GW consented.
• Behind this sits a much larger pipeline of projects expected to deliver into the 2030s – totalling 100GW.
• Between 2021-25 less than 2% of steel components used in UK wind farms were fabricated in the UK, and almost none using UK made steel.
• The offshore wind industry developed and published the Industrial Growth Plan (IGP) in 2024, which has been used as a basis for developing the UK steel Bill of Works.
• The IGP sets out a path to tripling the UK's manufacturing capacity and was produced in partnership with the Crown Estate, Crown Estate Scotland, the Offshore Wind Growth Partnership and RenewableUK.
• LumenEE says that The UK is part of a larger global market expected to deliver 2,000 GW of fixed and floating offshore wind by 2050. If the UK can find a route to supply the quality, volume and well-priced steel and fabrication, there is a route to compete with other European steel mills and fabricators.

Steel requirements:

• Between 2026 and 2050 the UK offshore wind pipeline will require between 20 and 25 million tonnes of steel. This has an estimated £21bn of value.
• The UK's biggest opportunity for steel supply will come from supply of plate. 88% of steel required for offshore wind components needs to come from heavy gauge plate mills.
• The UK will need almost 2.5Mt of steel rebar and tensioning strands.
• As well as plate, rebar and tensioning strands, the UK offshore wind pipeline needs a range of other steel types, including rolled open sections, hollow sections, castings, welding materials and flux and bolts.

About UK Steel: UK Steel is the trade association for the UK steel industry. It represents all the country's steelmakers and most downstream steel processors.

The UK steel sector:   

• Produces 5.6Mt of crude steel a year, equivalent to 70% of the UK's annual requirement (annual demand of 7.6Mt in 2023, of which 40% was met by domestically produced steel)
• Employs 33,700 people directly in the UK and supports a further 42,000 in supply chains
• The median steel sector salary is £37,315, 26% higher than the UK national median and 35% higher than the regional median in Wales, Yorkshire, and Humberside, where its jobs are concentrated
• Directly contributes £1.8 billion to UK GVA and supports a further £2.4 billion
• Directly contributes £3.4 billion to the UK's balance of trade 96% of steel used in construction and infrastructure in the UK is recovered and recycled to be used again and again. 
•  

For further information about the steel industry, please see the 2024 press pack, Why the UK needs a strong steel sector or the 2024 UK Steel Key Statistics report. 

Downloads

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  UK Bill of Works Phase1 Executive Summary [public]

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  UK Steel - Public procurement of steel time for new thinking - 2024

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