Community and UK Steel welcome Steel Strategy

UK Steel and Community welcome the Government’s Steel Strategy, which outlines the Government's commitment to fostering a robust and competitive steel sector.  The government, led by the Department for Business and Trade, has taken massive strides towards creating a landscape that can attract private investment and ensure our industry not only survives but thrives. 

The Government has been incredibly bold in its approach to trade, and we look forward to continuing our work with officials to address outstanding challenges facing the UK steel sector. While the announced trade measure is a game-changer, continued progress on industrial electricity prices, an effective carbon border policy, and a strengthened procurement policy will be required to harness growth opportunities. 

Trade policies 

The trade measures announced in today’s Steel Strategy represent a transformation in the UK Government’s pursuit of a sustainable steel sector that is attractive to private investors. The headline cuts to import quotas go even further than similar measures taken in the US, Canada and EU, and make clear that the Government recognises the distortions that overcapacity and extreme subsidy have created in global steel markets. 

Domestic steelmakers have seen their share of UK steel demand slump to just 30% as a continuous flow of subsidised steel floods into international markets and undercuts domestic producers. The Government has recognised that in a time of growing geopolitical risk and repeated disruption to global trade, it is clear the UK must domesticate more of its critical supply chains to increase its resilience. The UK cannot afford to be dependent on imports for the steel we need for our national security in areas including defence, grid infrastructure and civil nuclear. 

UK Steel also welcomes the Government’s expansion of trade defence to aid our producers of bright bar, non-alloy wire, and stainless steel. The UK has tragically lost several important companies in these sectors, and the new measures will not only stem that loss of capability and jobs but also encourage investment and expansion. More must be done to protect our customers as they face the same threats from subsidised manufactured products as we do, and we are happy to support that effort. 

Procurement 

The Government has implemented a range of measures to enhance public procurement, such as refining the Public Procurement Notice for steel. The industry maintains ongoing collaboration with the Government to advance procurement policy improvements. 

Energy prices 

UK steelmakers face industrial electricity prices 14% higher than in Germany and 25% higher than in France. While the Government increased compensation for electricity network charges in the Industrial Strategy, the Steel Strategy does not contain any new initiatives to deliver competitive industrial power prices. Without further action, persistently high electricity prices will continue to impact the sector’s competitiveness and the UK’s ambition to invest in a sustainable, low-carbon steel industry. 

UK Carbon Border Adjustment Mechanism (UK CBAM) 

UK Steel warns that the UK CBAM risks making importing Chinese steel cheaper than producing lower-emission steel locally. The HMT-led policy also covers a narrow range of products, so importers can avoid the UK CBAM by switching to finished or semi-finished steel-containing goods not included in its scope. Finally, the increased carbon costs will make UK steelmakers uncompetitive in non-EU markets, without an export solution. These issues risk favouring imports over domestic production instead of creating a fair market. 

While the progress made to support the sector is encouraging, significant challenges remain. Resolving carbon border policy and delivering competitive industrial energy prices will be critical and require action from the Treasury and DESNZ to secure the long-term future of the UK steel sector. 

On the Steel Strategy, Gareth Stace, Director General, UK Steel, said: 

“We welcome the Government’s Steel Strategy as a vital step towards securing a competitive, resilient future for one of the UK’s most strategically important industries. 

“This is a significant moment, and Government ministers deserve recognition for their leadership today.

“The Government’s bravery in taking the required measures represents a real shift in the culture of Westminster from protecting the ideology of free trade at any cost, to defending critical industries and national security. 

“Steel underpins our national security, our energy transition, and the delivery of critical infrastructure. Yet for too long, the UK has lacked a coherent, long‑term plan to support the sector. Today’s strategy acknowledges the essential role steel plays in every part of the economy and sets out the direction needed to attract investment, boost innovation, and strengthen our industrial foundations.  

“This is a crucial moment: with global markets distorted by overcapacity and subsidy, a clear and ambitious domestic strategy is exactly what is required to ensure steelmaking not only survives in the UK but thrives.”

Community Union General Secretary, Roy Rickhuss CBE, says: 

“Since taking office in 2024, the Government has taken many decisive steps to support the steel industry and those who work within it. This Steel Strategy represents the culmination of these efforts.  

“In particular, the urgent and necessary action taken to intervene in British Steel last spring and SSUK in the autumn has demonstrated the Government’s unyielding commitment to protecting the sector and the thousands of jobs it provides in communities across the country.  

“The trade measures outlined in this Strategy represent a bold and significant step forward, strengthening our domestic industry and helping to ensure that local economies continue to benefit from a secure, resilient steel sector and the employment it provides. 

“We commend the Department for Business and Trade for their work on this Strategy and look forward to continuing to engage with the Government to support the ongoing strength and success of UK-produced steel.”

On the trade measures announced, Peter Brennan, Director, Trade & Economics Policy, UK Steel, said: 

“These trade measures represent a tremendous commitment from a government that totally understands the landscape of the global steel industry and is ready to do what is needed to revitalise our industry. 

“The global steel industry is blighted by overcapacity and subsidies that are threatening deindustrialisation in much of the developed world. Until countries such as China sufficiently scale back their capacity, trade measures are, unfortunately, a necessary tonic. 

“The Department of Business and Trade has worked tirelessly with UK Steel, our members and the broader supply chain to balance how far it can go with quota cuts to balance the needs of steelmakers and downstream sectors.”

On the energy policy, Frank Aaskov, Director, Energy and Climate Change Policy, UK Steel, said: 

“Despite this Government’s progress on shielding steelmakers from network costs in electricity bills, the strategy fails to address the need for action on wholesale power prices. That omission leaves the final piece of the competitiveness jigsaw firmly missing. 

“The Strategy’s assessment of the UK CBAM is at odds with our understanding of its current design. As it stands, the UK CBAM could favour imported Chinese steel over steel made in the UK. Without a change in direction from HM Treasury, the policy risks achieving precisely the opposite of its stated aim. The steel industry is ready to work with Government to address both issues.”

ENDS.  

Contact details: Jon Harrison, Regulatory Affairs Manager, UK Steel jharrison@makeuk.org, 07743829613   

Daniel Chappel, Political Officer, Community trade union, dchappel@community-tu.org, 07597581980     

Notes to editors: 

Trade measures: 

• European Commission proposed to cut its steel import quotas by 47%: Commission proposes plan to protect EU steel industry from unfair impacts of global overcapacity 
• China subsidises its steelmakers at ten times the OECD average (source: OECD Steel Outlook 2025 | OECD). 
• OECD projected global overcapacity to exceed 680 million tonnes in 2025, representing 27% of total capacity. OECD forecasts overcapacity to increase to 721 million tonnes by 2027, in part driven by China. (Source: 98th Session of the Steel Committee: Statement by the Vice-Chairs) 
• China exported a record 120 million tonnes in 2025. For context, besides China, only one other country (India – 164.9 million tonnes) even produces that volume. China produced over half (960.8 million) of the 1.803 billion global total in 2025, according to the World Steel Association (Source: https://worldsteel.org/media/press-releases/2026/december-2025-crude-steel-production-2025-global-crude-steel-production/ 

Industrial electricity prices: 

• UK Steel’s analysis indicates that the average price faced by UK steelmakers for 2025/26 is £59.48/MWh compared to the German price of £52.04/MWh and the French price of £47.76/MWh, after network compensation is increased to 90%. This indicates a price disparity of £7-12/MWh, meaning the industry will pay 14-25% more for their electricity than European competitors. 
• The primary driver of the price disparity is now wholesale electricity costs, which are largely driven by the UK’s reliance on natural gas for power generation. Further reforms are needed to reduce wholesale electricity prices for the steel industry, including a wholesale price rebalancing mechanism, as recommended by the independent consultancy Baringa.
• Steel production is incredibly electro-intensive, and power costs can represent up to 180% of steel producers’ Gross Value Added (GVA) in the UK. With a switch to electric arc furnaces, the sector’s electricity consumption is expected roughly to double.
• In the Industrial Strategy (June 2025), the Government has increased compensation for network charges to 90%, in line with European competitors, following recommendations from UK Steel. UK Steel estimated that this will reduce power prices by approximately £6.5/MWh and save the steel industry £14.5 million per year.
• Currently, the UK steel industry’s electricity use is equivalent to that of 800,000 homes, and an electric arc furnace uses approximately 0.5 MWh of electricity per tonne of steel.
• The Labour Government stated in its manifesto that “British industry is also held back by high electricity costs, which has often made investing here uncompetitive. Labour’s clean energy mission will drive down those bills, making British businesses internationally competitive [...]”.

UK Carbon Border Adjustment Mechanism: 

• The UK Government will introduce a Carbon Border Adjustment Mechanism (CBAM) for steel and other industrial products in 2027. It aims to apply a carbon price on imported steel that mirrors the carbon costs faced by UK producers. Its purpose is to create a level playing field so that domestic manufacturers paying the UK Emissions Trading Scheme (UK ETS) carbon price are not undercut by foreign competitors operating in countries with weaker or no carbon pricing. By equalising carbon costs at the border, CBAM is intended to prevent carbon leakage, i.e., where production and emissions shift overseas rather than being reduced in line with UK targets. 
• The current UK CBAM design risks making high‑emission imports cheaper than UK‑made steel because importers can use global‑average default emission values that significantly underprice carbon‑intensive steel. 
• A narrow product scope leaves clear circumvention routes through downstream steel‑containing goods, risking significant offshoring of UK manufacturing supply chains as importers shift to finished or semi‑finished products not covered by CBAM. 
• The absence of an export solution creates a de facto penalty on UK steel sold into non‑EU markets, threatening volumes, competitiveness, and jobs as UK producers face rising carbon costs not borne by international competitors. 
• UK Steel recommends: higher default values, granular CBAM rates, export protection, wider product coverage, and early, regular reviews to ensure the CBAM works as intended. 

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. 

About Community: Community is the steelworkers’ union. More steelworkers are members of Community than any other union. We are committed to fighting for a just transition that ensures both steelworkers and the UK steel industry thrive. 

As the leading trade union for the UK steel industry, we proudly represent thousands of steelworkers across the country, including those at British Steel, Tata Steel, Celsa Steel, Liberty Steel, and more. 

For over 100 years, we have stood alongside steelworkers and remain deeply committed to the industry’s future. With unparalleled knowledge and expertise, we provide a first-class service to our members. We also lead negotiations with all major steel employers, representing workers across steelworks, foundries, steel and wire production, and manufacturing throughout the UK.