Steel chiefs blast Tory dithering that risks foreign goods being 'dumped' on UK
Steelmakers today blasted delays in slapping a new tax on foreign imports from countries like China.
Chancellor Jeremy Hunt unveiled plans for a “carbon border adjustment mechanism” (CBAM) which will place new duties on products from overseas in the iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement industries. The move is aimed at helping UK companies compete by ensuring they are not undercut for meeting strict environmental standards on pollution.
However, trade body UK Steel warned the measure would only come into force 12 months after the EU imposed a similar rule. It feared that would give countries a year to dump cheaper products banned from the EU on the UK market instead. "By confirming a CBAM from 2027 instead of matching the EU’s 2026 timeline, the Government risks high-emission steel being dumped in the UK 2026 when the EU CBAM takes effect,” said UK Steel. “The steel sector has repeatedly warned Government against not mirroring the EU implementation timetable, as this would leave the UK steel industry exposed.”
Director-general Gareth Stace said: “Implementing the UK scheme one year after the EU CBAM starts is hugely concerning. Despite the steel sector repeatedly warning officials how exposed the UK would be if it did not mirror the EU implementation timetable, Government today seems to be actively planning for just that scenario.”
The Treasury finally announced that goods imported into the UK “from countries with a lower or no carbon price will have to pay a levy by 2027”. It insisted the move “will ensure the environmental integrity of our decarbonisation policies”.
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The announcement comes as Britain’s biggest steel firms continue to press ahead with moves to close coal-fired blast furnaces and switch to less-polluting electric arc furnaces - costing thousands of jobs. The UK steel industry is blamed for 14% of the UK’s industrial emissions and 2.7% of all Britain’s greenhouse gases.
The Chancellor said: “This levy will make sure carbon intensive products from overseas – like steel and ceramics – face a comparable carbon price to those produced in the UK, so that our decarbonisation efforts translate into reductions in global emissions. This should give UK industry the confidence to invest in decarbonisation as the world transitions to net zero.”
Mr Stace said: “A UK CBAM is essential to securing investments in new green steel production and making sure that low-emission, UK-made steel is not undercut by high-emission, imported steel which has not faced carbon costs. Steel trade on equal terms can be achieved by a robust and industry-based UK carbon border policy. With a delayed timeline, the Government must now get the implementation right. If the CBAM is easily bypassed while carbon costs rapidly rise for UK industry, Britain's steel sector could suffer huge damage.”
Community union assistant general secretary Alasdair McDiarmid said: "Whilst we welcome the government's overdue acknowledgement for the need for a CBAM, it's puzzling and alarming that they've chosen to delay this until 2027 - a whole year after the EU introduce their equivalent legislation. This will result in dirty steel imports from heavy-polluting countries being diverted from the EU to the UK for a year.
“It will represent a hugely damaging blow to our domestic steel sector, with a threat to jobs across the country. At a time when we need government to stand with our UK steel industry - including through supporting it to decarbonise - this Conservative Government seems all too willing to shrug its shoulders and give overseas competitors a head start."
Laith Kharus Whitwham, senior policy advisor at climate change think tank E3G, said: “There has been a missed opportunity to align the timing and design of the UK's carbon pricing regime with that of the EU, risking higher near-term costs for domestic producers.”
Prime Minister Rishi Sunak’s spokesman defended the delay, saying: “Implementation in 2027 will allow us to fully consult with those businesses that are affected in the design and implementation phases. Also, it gives businesses in the UK and overseas more time to prepare for the changes and put the right processes in place.”
The Mirror has been campaigning to Save Our Steel since 2015.
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