UK unveils GBP2.5 billion investment plan for steel industry

The UK government has pushed forward plans for a GBP2.5 billion ($3.15 billion) investment in the UK, publishing a "plan for steel consultation" on Feb. 16, weeks before planned, with Business Secretary Jonathan Reynolds unveiling the initiative to tackle the long-term challenges facing British steelmakers.

This comes after US President Donald Trump decided to impose a 25% import tariff on all steel products imported into the US, a move that could arm the already fragile steel domestic industry.

The funding will be allocated through the National Wealth Fund, and the investment will focus on initiatives that ensure a sustainable future for the industry, including the development of electric arc furnaces and other enhancements to UK capabilities.

"Britain is open for business, and this government has committed up to GBP2.5 billion to the future of steel to protect our industrial heartlands, maintain jobs, and drive growth as part of our Plan for Change," Business Secretary Jonathan Reynolds said.

"The Plan for Steel will help with the issues which have been holding the industry back for too long," Reynolds said, adding that the government is wasting no time in taking immediate action to support the industry, as this week, Heathrow Airport announced a multimillion-pound investment, which will require 400,000 mt of steel.

Immediate actions were also taken to enhance production at Port Talbot, with plans for a modern EAF, and the implementation of the British Industry Supercharger, which aims to reduce electricity costs for steel firms, aligning them more closely with international competitors.

In addition to these investments, the government has simplified public procurement processes to better position UK firms, including those in the steel industry, to compete for public contracts.

To make the UK competitive globally, the Plan for Steel will examine the electricity costs for steel companies, unfair trading practices, and the need for improved scrap metal recycling.

The government will work closely with the Steel Council toward the launch of the steel strategy in the spring, and the council will continue to meet regularly following its publication to help drive investment into steelmaking communities across the country.

"The government's commitment to our steel sector is both vital and welcome," Gareth Stace, director general of UK Steel, said. "A robust, bold, and ambitious steel strategy has the power to reverse the sector's decline, particularly as we face increasing competition from imports benefiting from more favorable business conditions. By setting out a clear business plan and roadmap for investment, the government can secure a brighter future for our industry, safeguard jobs, and support steelworkers and their families."