Schneider Electric: Green Hydrogen to Revolutionise UK Steel
The journey of British steel has been fraught with challenges and recent developments have not made the path any easier.
Despite the UK government's pledge of a £500m (US$660m) rescue package for the Tata-owned Port Talbot Steelworks, the plan has faltered. This means the closure of two furnaces and the loss of 2,500 jobs, with an additional 300 roles expected to disappear in the next three years.
This situation not only affects the local communities but also signals a continuing downward spiral for Britain's once-proud steel industry.
Amid calls for a revival across the manufacturing sector, the question remains: can steel make a comeback in the UK?
Some industry players like Schneider Electric are looking towards a brighter future despite the bleak outlook. They envisage a new dawn for British steel, spearheaded by green hydrogen technology.
This innovative approach, Schneider believes, promises to rejuvenate the steel industry, contribute to global clean energy efforts and generate new employment opportunities in the green sector.
British steel: A challenging landscape
In the glory days of the late 1960s and early 1970s, steel was a titan of British industry. By 1970, Britain ranked as the world's fifth-largest steel producer, boasting an output of more than 28.3 million tonnes and providing jobs for more than 320,000.
Regions like Teesside and Scunthorpe thrived on steel production, driving economic growth and employment. However, the sector's decline has been steep, fuelled by privatisation, lack of subsidies and soaring electricity costs due to the industry's carbon-heavy processes.
Fast forward to today and the UK's steel production has plummeted to 5.6 million tonnes, placing it 26th globally and slashing its workforce drastically. This decline has profound implications for manufacturing at large, stripping away the foundation for countless industries from automotive to shipbuilding. To reverse this trend, the industry must embrace innovation and chart a fresh, dynamic course for UK manufacturing.
According to Schneider Electric, this path forward is brightly lit by the prospects of green steel production.
Schneider Electric: A Green horizon for steel?
“The steel industry is undergoing significant disruption and transformation on a global scale,” says Alex Richards, Vice President EMEA, Mining Minerals and Metals at Schneider Electric
“For a long time, it has been a critical industry to the UK, so while the news about potential job losses obviously comes as a concern, it is essential to shift our focus from managing decline to seizing opportunities for growth at this pivotal juncture.”
At the heart of this transformative vision lies green hydrogen.
“Steel is a hard-to-abate industry, but also a key material for our decarbonisation efforts,” he says.
“In order to future-proof steel production in the UK, we need to be looking at adjacent industries that support growth and decarbonisation simultaneously through a transition to green steel.
“One such opportunity is green hydrogen. Green hydrogen enables the production of direct reduced iron (DRI), which in turn can be used to manufacture green steel.
“Producing DRI using green hydrogen can result in over a 95% reduction in CO₂ emissions compared to steel produced with coal. This presents an opportunity to sustain a steel industry with significantly less environmental impact.”
Job creation in the green economy
While sustainability is paramount, the transition should not overlook the workforce.
Alex champions green hydrogen as a catalyst for job creation, marrying environmental objectives with economic ones.
“It's easy to look at news like today’s and worry about the future, but with change comes opportunity,” says Alex.
"By linking the decarbonisation of British steel with the development of green hydrogen, the UK can play a significant role in the global clean energy transition and support the workforce by creating new green jobs.”
As the sector navigates towards sustainability, the balance between environmental stewardship and worker welfare will be key. With initiatives already in motion to enhance redundancy and retraining packages, the foundation is being laid for a responsible transition to greener jobs and industries.
Sustainability isn't just about environmental conservation; it's also about securing a prosperous, equitable future for all. As we forge ahead, the blend of innovation, policy, and industry collaboration will be essential in reinventing British steel for the 21st century and beyond.
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