Ministers may scrap the controversial climate change levy to help revive British steelmaking, The Mail on Sunday can reveal.
Experts predict the taxpayer may have to pump billions more into UK steelmaking after the Government took control of Britain’s last blast furnaces in Scunthorpe.
Demand for steel is set to soar as Britain rearms and seeks to be more self-sufficient to avoid tariffs.
Business Secretary Jonathan Reynolds told The Mail on Sunday: ‘Let’s have this growth in demand met by British steel if we can.’
Shut: Tata Steel’s Port Talbot blast furnaces in South Wales closed in autumn
He said 40 per cent of UK demand for steel was met domestically, compared with 80 per in the EU.
Industry body UK Steel says this country produces 5.6 million tons a year compared with 30 million tons 60 years ago – and a fraction of the 126 million tons produced by the EU and 1 billion tons from China.
The Government is committed to pay £500 million to a 3.1 million ton-capacity, £1.25billion electric arc furnace at Port Talbot, where the furnaces closed last autumn. It has also offered £500 million towards two furnaces with a total capacity of 3 million tons in Scunthorpe.
But the electricity these require is expensive in the UK, as the climate change levy lifts generating costs.
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