Steel industry granted some valuable breathing space from EU

Plants in Scunthorpe and Port Talbot will now be given until the middle of 2019 to meet Industrial Emissions Directive requirements

Steam rises from the blast furnaces at the Tata owned steel works in Port Talbot, Wales (Getty)

The UK’s battered steel industry has been given a boost after two under-threat steel plants were offered a four-and-half-year reprieve from costly European Union regulations that could have put them out of business.

Steel plants in Scunthorpe and Port Talbot will now be given until the middle of 2019 to meet the requirements, known as the Industrial Emissions Directive, staving off further expenditure for an industry squeezed by falling global steel prices.

The rules originally forced plants to comply with stringent emission regulations by the start of 2016, threatening to sink them due to the heavy spending required on new kit to bring them up to scratch

The two plants that won the reprieve – owned by steel giant Tata – have also been shielded by the Government from rules from the Environment Agency forcing them to upgrade their emissions-saving kit.

The Business Secretary, Sajid Javid, will travel to Brussels to meet with European Commission officials to plead for a variety of measures to help the UK industry, including firmer action on Chinese steel makers flooding the UK with cheap steal.

He said: “I want to see steel top of the EU agenda. We cannot stand by while the steel industry across Europe, not just in the UK, faces such unprecedented challenges.

“There are no straightforward solutions to the complex global challenges but the UK Government wants to work with the EU and our European partners to do all we can to support our steel industry.”

The UK steel industry is in chaos after a huge oversupply of steel from China, where production has left warehouses filled to the brim with unwanted steel, forcing a glut of the metal onto global markets at lower prices, reducing the overall price companies pay for it.

Jobs have already been lost in the UK, with the closure of SSI’s plant in Redcar costing 2,200 positions.

Tata also announced plans to cut 1,200 jobs earlier this month while a number of units at downstream steel group Caparo went into administration, threatening 1,700 jobs.

Gareth Stace, director of the steel trade body UK Steel, warned that there were just weeks to save the industry, comparing the sector to a bleeding patient who might die on the operating table.

“This process cannot take three to four months. The secretary of state needs to come back from Brussels with approval [for state assistance].” he told a select committee hearing.

Mr Javid will meet EU Trade Commissioner Cecilia Malmstrom, Industry and Internal Market Commissioner Elzbieta Bienkowska and Vice-President Jyrki Katainen during his whirlwind trip to the continent this afternoon.

UK Steel has asked the Government to help fix five key areas, including more time to comply with emissions targets and action on China’s steel dumping.

Higher energy prices and business rates paid by steel producers compared with their European neighbours are also areas where UK Steel said more can be done.

The Labour MP Nia Griffths told the select committee hearing that the industry faced energy costs up to 40 per cent higher than competitors while business rates were up to five times as high.

Mr Stace said: “We’re not asking the taxpayer to bail us out – we’re just asking to be put on a level playing field.”

The Carbon Price Floor, which sets a minimum price for energy but also increases the costs, has been blamed for driving up the cost of operating steel plants in the UK compared to places such as Germany.