EU 2030 needs strategy for steel
The EU’s 2030 deal, agreeing to reduce the region’s carbon emissions by 40% by 2030 can be viewed as a mixed bag from the perspective of the UK’s steelworkers, whom Community represents.
It was encouraging to see the Commission recognise that an industrial strategy is crucial in reaching that target. These are positive steps towards providing the kind of certainty for investors, which a capital- intensive industry such as steel desperately needs. However, the fact the EU aims to remain in the vanguard of tackling climate change, means that without turning talk of an industrial strategy into action, there is a serious risk of carbon leakage – where jobs are exported to countries with less ambitious environmental policy or with more carbon-intensive heavy industry.
This risk was highlighted earlier this week by a leaked report from the UN Inter-governmental Panel on Climate Change, which found increasing outsourcing of carbon emissions from rich countries to rising economies. As we have always argued, climate change is a global problem that needs a global deal and the EU should now push for other countries to match its ambition. From an industrial perspective the EU should also ensure that its own member states deliver the ambitions outlined in the Tajani Steel Action Plan.
Last week, the Foundation Industries report, commissioned by Tata Steel, echoed much of what Community has been saying for years about the importance to our overall manufacturing base of sectors such as steel and many other energy-intensive industries. We should note that some progress has been made by this government in terms of recognising the overall need for an industrial policy, which continued some of the welcome industrial activism of the last government. However, we believe that it’s no use having government strategies for sectors such as aerospace or construction, without developing and supporting the local industries that could supply them. First and foremost, the government needs to fast-track the compensation package for energy-intensive industries and match the support of competitor countries such as Germany, so that UK plants, as a minimum, are not disadvantaged within Europe.
No doubt yesterday’s announcements will bring some new challenges for the UK’s energy intensive industries, among which will be the devil in the detail of a revised emissions trading system. Nevertheless, given the certainty required in terms of environmental and energy policy to meet such a target, what is also necessary now is long-term certainty in UK industrial policy, which ensures it can still compete.
Some may blame Europe for imposing more ‘green crap’ but much of what happens in this area is in the UK government’s control, hence the fact that UK industry pays more for its energy than its competitors in France and Germany. Many of the policy responses and much of the support required for UK energy intensive industry are in the gift of our own government. This means the achievement of a long-term consensus on industrial policy and support should be a priority across all major political parties.
In this way, by 2030, not only will we achieve the 40% carbon reduction target, or even 50% here in the UK, but we will also have a thriving, re-balanced economy that continues to make steel.