Support for growth in manufacturing is welcome
Carbon Floor Price will impose additional unilateral costs
Karl-Ulrich Köhler, MD & CEO of Tata Steel’s European operations, has reacted to the second Coalition Budget presented today by the Chancellor of the Exchequer.
“Overall we support the aims of this budget and its emphasis on stimulating growth in the business sector, particularly in manufacturing, where we have been working with the government on ways to generate growth. We are pleased to see the creation of 40,000 new apprenticeships. We need technically skilled people if we are to create well paid manufacturing jobs in the future.
“It is also good news that the Tees Valley is to be among the first of the government’s newly created Enterprise Zones, as Tata Steel will remain a major employer in that region after the completion of the sale of our Teesside Cast Products plant.
“The increased support for technical innovation and R&D is also welcome, as is the additional £200 million to be spent on regional transport investment.
“The establishment of a green investment bank to promote low-carbon energy projects is a positive development, as almost all such projects need large volumes of steel.
“But we are disappointed not to see greater emphasis on ensuring that future investment in energy infrastructure – paid for by British electricity consumers – will be carried out and supplied by UK-based companies. This is vital if we are to rebuild the UK’s steel-intensive manufacturing supply chains.
“The extension of the Climate Change Agreements and the return of the discount on the Climate Change Levy to 80% will come as modest but welcome relief to Britain’s hard-pressed energy-intensive industries.
“However, these benefits are likely to be dwarfed by the introduction of the Carbon Floor Price (CFP), which represents a potentially severe blow to the sustainability of UK steelmaking.
“European steelmakers already face the prospect of deteriorating international competitiveness because of the proposed unilateral imposition by the European Commission of very significantly higher emission costs under Phase 3 of the EU Emissions Trading System. The CFP proposal will impose additional unilateral emission costs specifically on the UK steel industry by seeking to artificially ensure that these costs cannot fall below government-set targets which no other European country will enforce. This is an exceptionally unhelpful and potentially damaging measure.”
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About Tata Steel in Europe
The European operations of Tata Steel (formerly known as Corus) comprise Europe's second largest steel producer. With main steelmaking operations in the UK and the Netherlands, they supply steel and related services to the construction, automotive, packaging, material handling and other demanding markets worldwide.
Tata Steel is one of the world’s top ten steel producers. The combined group has an aggregate crude steel capacity of more than 28 million tonnes and approximately 80,000 employees across four continents