Steel industry concerned about the pace of energy assistance

Scunthorpe steelworker

The UK steel industry has expressed concern over the possibility of additional job losses before any government assistance for electricity costs is implemented.

British Steel's decision to eliminate 260 jobs has raised concerns among Gareth Stace, director general of UK Steel, that this may be the beginning of a trend in the industry.

For industries that use a lot of energy, the government has outlined plans to lower electricity costs starting in 2019.

The price of electricity has skyrocketed for businesses that produce chemicals, paper, and steel.

The UK's energy-intensive industries would now pay energy costs comparable to those in other developed nations, according to changes proposed by the government on Thursday.

Steel, paper, chemicals, and other metals are among the 300 companies that employ 400,000 people and stand to gain from the changes that would exempt them from paying certain costs and taxes.

The support would ensure that "UK industries like steel and chemicals remain competitive on the global stage," according to Business and Trade Secretary Kemi Badenoch.

Steel production requires a lot of energy, and as prices have risen recently, the cost of producing the metal has also increased.

However, according to industry group UK Steel, steel producers are paying about 60% more for electricity than their counterparts in other nations like Germany because of additional taxes and carbon costs.

The government's proposals, according to Mr. Stace, are "very welcome" and will help close the pay gap between UK steelmakers and rivals in Europe.

However, he stated that it was "particularly concerning" that the proposals would not be put into action right away and would instead be subject to consultation in the spring.

In steel, a year is a very long time, so we might see a decrease in our electricity prices in a little over a year, he said on the BBC's Today program.

He expressed concern that if the UK's steel industry did not have a "competitive business environment," investment would decline and additional announcements akin to British Steel's could occur.

British Steel announced on Wednesday that it would close its coking ovens in Scunthorpe and eliminate up to 260 jobs as a result of "unprecedented" increases in energy costs and environmental requirements.

The biggest steelworkers' union added that British Steel's job cuts could have a "catastrophic impact" on the UK as a whole. Unions said the action was a worrying sign for the health and future of the UK steel industry.

The new proposals follow the government's decision to more than double the budget of the Energy Intensive Industries Compensation Scheme and extend it for a further three years.

The program offers relief to businesses for the price of some levies on their electricity bills.

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