British Steel’s move to axe 260 jobs and close its coking ovens in Scunthorpe could have opened the doors for widespread cuts across the sector, say industry bosses.
Gareth Stace, director of Trade body UK Steel, suggested British Steel’s move could spur other companies to follow suit after the sector has faced soaring energy and operating costs this year.
He warned investment into the sector could shrink without urgent government support with power bills, which were especially high after the Ukraine war given the energy-intensive nature of producing steel and steel products.
"We might see our electricity prices going down in just over a year's time [...] a long time in steel,” he said to the BBC.
Firms could gain tax breaks and be exempt from certain renewable energy obligations under proposed plans for next year.
British Steel said its energy and carbon bills alone rose by £190mln in the past twelve months.
A three-year extension of the Energy Intensive Industries Compensation Scheme has also been granted, aiding companies struggling with higher costs.
Stace added reforms could help with “bridging the gap” between the UK and European steel sectors.
However, the time taken to help the sector has been “particularly concerning” so far, he said, suggesting more help was needed to create a “competitive business environment”.