Clare Jackson
CEO, Hydrogen UK
The nation’s Steel Strategy aims to retain and build the sector while aligning with decarbonisation goals, ensuring that environmental progress does not equate to industrial decline or job losses.
Central to the Steel Strategy is hydrogen, which could replace internationally reliant fossil fuels in the blast furnaces and secure our domestic production capabilities of virgin steel — all with low carbon emissions.
Green steel investment boost
The National Wealth Fund has earmarked at least £5.8 billion towards sectors crucial for this transition, including green hydrogen and green steel. This is because hydrogen’s potential lies in its ability to reduce coke (a type of fuel derived from coal) usage by up to 20%, leading not only to lower fuel costs but also improved efficiency within the blast furnaces. This means long-term savings on coal and decreased coke-making capacity requirements, justifying the initial investments in hydrogen generation.
Additionally, hydrogen injection into blast furnaces boosts productivity and cost efficiency while significantly cutting CO2 emissions. This reduction allows companies like British Steel to earn carbon credits through cap-and-trade systems, effectively equalising some of the transition costs.
UK steel production companies that
are investing in cleaner technologies
aren’t at a competitive disadvantage.
UK steel decarbonisation push
As the UK develops its Steel Strategy with a focus on decarbonisation while avoiding deindustrialisation and safeguarding jobs, the implementation of a Carbon Border Adjustment Mechanism, or CBAM, in 2027 will further support this effort. CBAM is designed to protect UK industries from being undercut by cheaper imports that have a higher carbon footprint.
This means that if a foreign company produces steel using methods that emit more carbon, their products could face additional charges when entering the UK market. This helps ensure that UK steel production companies that are investing in cleaner technologies aren’t at a competitive disadvantage.
Hydrogen UK continues to advocate for the adoption of hydrogen technologies across industries that cannot electrify. By investing in this clean energy source now, the UK steel industry can secure its place at the forefront of a burgeoning global market while contributing meaningfully towards national objectives — a win-win scenario for industry, the economy and environment alike.
