UK climate change programme : memoranda relating to the inquiry submitted to the Committee / Environment, Transport and Regional Affairs Committee.

  • Great Britain. Parliament. House of Commons. Environment, Transport, and Regional Affairs Committee.
Date:
1999
Catalogue details

Licence: Open Government Licence

Credit: UK climate change programme : memoranda relating to the inquiry submitted to the Committee / Environment, Transport and Regional Affairs Committee. Source: Wellcome Collection.

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    MEMORANDA SUBMITTED TO THE ENVIRONMENT, TRANSPORT AND REGIONAL AFFAIRS COMMITTEE Memorandum by the UK Steel Association (CC 1) UK CLIMATE CHANGE PROGRAMME Tue UK Steet AssoctATION The UK Steel Association (UK Steel) is the trade association for the UK steel industry. It represents the industry to policy and opinion formers, promotes the industry and the importance of steel to the public and provides information and services to its members. Over 95 per cent of UK steel producing companies, and many UK steel processing companies, are members of the UK Steel Association. Tue UK STEEL INDUSTRY The sector is of major importance to the UK economy. It provides 60,000 direct jobs, is an essential supplier to a wide range of UK industries, and contributed some £2.3 billion to the UK’s balance of trade in 1996 and because of the recyclability (40 per cent of “new steel” comes from recycled material) of its products and many of its by products is a significant contributor to the UK’s sustainable development. Steel is a commodity product traded worldwide. The UK steel industry exports over 50 per cent of its production in highly competitive markets, where quality and delivery are taken as read, and price is all. Cost increases generally cannot be passed on. Indeed the pressure is for prices to be reduced. For instance, between 1992 and 1997 the price of ferrous scrap, which is the major raw material input into electric arc furnaces, increased by circa 50 per cent. This cost increase had to be absorbed, an indicator of this being that the price of merchant bar, a product produced via this process, was virtually the same in 1997 as it was in 1992. The strength of sterling has severely dented the profitability of the sector and its contribution to the balance of trade, which fell from £2.8 billion in 1995 to £1.9 billion in 1997, even though the volumes of exports increased between 1995 and 1997. In 1998 the situation has worsened due to events in the Far East and their impact on the global economy. Given that energy costs are responsible for up to 20 per cent of total costs, increases in UK energy costs relative to the rest of the world, say through taxes or inadequate competition in energy markets, would have a devastating effect on the ability of the industry to compete. UK steel companies already pay up to 40 per cent more for electricity compared to their European competitors. The sector’s major energy users are regulated under UK Integrated Pollution Control (IPC) and also come under the provisions of the Integrated Pollution Prevention and Control Directive (IPPC). UK sTEEL AND CLIMATE CHANGE Past performance The UK steel industry acknowledges that it has a role to play in assisting the UK government to achieve its Kyoto Protocol commitments. The extent of its contribution is strongly influenced by the fact that steel is an energy intensive industry and has, in order to remain competitive in a global market, already devoted considerable effort to improving energy efficiency. Compared to 1970 it now takes 40 per cent less energy to produce a tonne of steel, whilst carbon dioxide emissions have halved. In contrast, emissions from road transport have almost doubled and are now some five times those from the steel sector.