British Steel

Richard Thomson Excerpts

Wednesday 8th November 2023 Commons Chamber

[Mr Speaker]

I call the Scottish National party spokesperson.

[Richard Thomson (Gordon) (SNP)]

May I begin by expressing my concerns on behalf of the 2,000 workers who are likely to be affected by this announcement? Also, I re-emphasise, as other contributors have, the importance of virgin steelmaking, not just in terms of security, but in meeting demand in the construction industry, where inflation is already racing ahead and our ability to build things will not be helped by being further away from the supply chain and reducing domestic capacity in steelmaking.

The Energy and Climate Intelligence Unit think-tank has said:

“Ageing blast furnaces need to be replaced and upgraded to produce greener steel…electric arc furnaces have a role in recycling steel”,

but

“failing to invest in modern hydrogen furnaces belies the government’s promises to invest for the longer term.”

Just as in the oil and gas sector, what plans do the UK Government have for a just transition for the steelmaking workforce? What support will the UK Government be giving to the development of hydrogen furnaces in the UK? What challenges will they put constructively to British Steel over these plans? Given the Government’s high-profile retreats on other climate measures, such as the date for banning the sale of internal combustion engine cars, how much faith can the industry have in any guarantees that the Government do make?

[Ms Ghani]

Negotiations are ongoing and nothing is concluded. The statement made by British Steel was a proposal, not a conclusion. The steel that comes out of electric arc furnaces can be used for a variety of things, including construction and military-grade steel—it is incredibly nimble—but I fully appreciate that different types of steel are produced out of different furnaces. The hon. Gentleman spoke about hydrogen, and the Government have a substantial hydrogen strategy that we launched in May 2022. The net zero hydrogen fund is worth up to £240 million of capital co-investment out to 2024-25. That will support upscaled hydrogen production projects, allowing companies, including steel producers, the potential to secure supplies of lower-cost hydrogen. Ultimately, decarbonisation pathways for specific sites are commercial decisions for individual companies based on their own operational circumstances. In the case of Port Talbot, it was about timing for using a technology that can be commercialised at scale. At the moment, for that part of the country, it is electric. Hydrogen may no doubt be the next stage of technology that is used.