Written Evidence Submitted by British Steel

(HNZ0098)

On 29 March 2021, the Chair of the House of Commons Science and Technology Committee wrote to four British steel manufacturers asking for information on:

• what actions they were taking to contribute to the 2050 UK Net Zero target, including:
• if they had set any specific emissions reduction targets;
• if they had produced a roadmap for emissions reductions;
• what role they saw for low-carbon hydrogen in decarbonising the UK steel industry;
• how much they were investing into research on hydrogen currently;
• any ongoing research into this area that they were involved in; and
• what support the Government could best provide to support them in decarbonising their business.

Reproduced below is the response that was received from British Steel, on 14 April 2021.

What actions British Steel is taking to contribute to the 2050 UK Net Zero target, including:

• if they had set any specific emissions reduction targets
• if they had produced a roadmap for emissions reductions

British Steel has increased the amount of scrap used in the integrated steelmaking route during 2020 and plans to further increase this (beyond the current thermodynamic restrictions of the process) by 2023. In addition to this, the business has started a project to add scrap to the blast furnace to displace iron ore. Please note that this requires approval by the Environment Agency. These measures will reduce carbon intensity by  ̴18% by 2023.

British Steel has developed an internal Low Carbon Roadmap discussion document for achieving a phased reduction of CO2 emissions by 2030, 2035 and 2050, in line with UK commitments to the Paris Agreement. The British Steel Low Carbon Roadmap meets the carbon emissions reductions expected by the Committee for Climate Change 6th carbon budget, and is in line with an emissions reduction required by the Steel Sector methodology as described in the Science Based Targets initiative (SBTi) (https://sciencebasedtargets.org/about-us).

What role British Steel sees for low-carbon hydrogen in decarbonising the UK steel industry

Through the development of the British Steel Low Carbon Roadmap, it is clear that low carbon hydrogen has a role to play in reducing emissions in the steel sector. It is likely that this will occur in the 2030s and 2040s as commercially available low carbon hydrogen capacity increases. The options considered for utilising low carbon hydrogen range from fuel switching away from natural gas (as used in a number of reheating operations), to use as a potential fuel gas for the manufacture of ‘hydrogen Direct Reduced Iron’ (hDRI). The scale of use is directly dependent on the future technology employed for primary Steelmaking.

How much British Steel is investing into research on hydrogen currently

British Steel has dedicated internal resource time on the Low Carbon Roadmap including how and when hydrogen becomes important in decarbonising the business activities. The Industrial Strategy Challenge Fund (ISCF) will review burner technologies and will give British Steel a high level understanding of the impact of using hydrogen as a fuel source.

Any ongoing research into this area that British Steel is involved in

British Steel has held exploratory discussions with key partners on the potential supply and use of hydrogen from the Zero Carbon Humber dual Carbon Capture and Storage and hydrogen pipeline.

What support the Government could best provide to support British Steel in decarbonising its business

The UK steel industry faces UK specific challenges that are different from those faced in other steelmaking countries. The percentage of Blast Furnace to Electric Arc Furnace production is higher in the UK than in most of the world. Future primary steelmaking routes could include hDRI to replace sintering and blast furnaces with the DRI being converted to steel in an Electric Arc Furnace (EAF). However, the policy and operating cost framework in the UK does not currently support or promote the use of EAFs. Without these first enabling steps, deep decarbonisation will not be possible as the true potential of hDRI may only be operationalised with EAF steelmaking.

The UK steel making sector would benefit and expand if electricity prices were at a level to facilitate expansion (parity with prices in Europe). This expansion would decarbonise the primary production of steelmaking with a reduced reliance on Carbon Capture & Storage (CCS) technology.

The UK is a net exporter of scrap steel and importer of steel products. Government should use existing powers to limit the export of scrap and drive UK recycling of scrap metal. British Steel believes it is within government’s ability to do this by preventing the export of scrap to non-OECD countries with lower health, safety and environmental protections than the UK. Improved segregation and retention of scrap in the UK will drive reductions in CO2 emissions.

The Steel Council, chaired by the Secretary of State for Business, Energy and Industrial Strategy, Rt Hon Kwasi Kwarteng MP aims to align and prioritise key issues of the sector. The UK Steel Sector and Government have committed to focus on 4 key areas to help the sector build a sustainable long term position: Electricity Prices, Decarbonisation, Procurement and Safeguards. British Steel encourages Government to act upon the output and recommendations of the Steel Council.

(April 2021)