Energy-intensive Industries

The hon. Member is making a good speech. Does he agree that it is high time the Government changed the regulations on hydrogen blending to allow that to happen in the gas network? At the moment, the gas management safety regulations do not allow any blending above 2%, which is contrary to the Government's own hydrogen strategy. The speaker highlighted the need for a just transition commission and support from the Government as industries move towards renewable energy. He emphasized the importance of decarbonization investment, particularly in sectors such as ceramics and steel, and criticized the high costs associated with nuclear energy projects like Sizewell C. Inquired about INEOS's role within the Scottish carbon capture cluster and requested that the government promote this initiative to reduce CO2 emissions from the company, which is currently a significant emitter in Scotland.

The debate focused on stabilizing energy prices for energy-intensive industries and decarbonising them. Gas prices have increased from 39p to over 200p a therm since last year, impacting these industries significantly. The government needs to act rather than wait for the price spike to resolve itself.

The hon. Member for Pembroke West Weshire congratulates him on his speech about the challenges faced by the steel industry and expresses agreement with his points, having lived in Sheffield where he witnessed similar issues. Bill Cash agreed with Jim Shannon's points, praising the nuclear delivery group for its progress towards better nuclear delivery in recent months.

Mr. Green highlighted the importance of reliable energy for businesses, advocating for a focus on nuclear power due to its reliability despite higher costs. He also raised concerns about offshoring manufacturing and the resulting export of emissions. Mr Chris Green intervened to ask about the reliability and stability of energy supply, suggesting that nuclear power could provide this feature. Asked the Minister for assurance that Severfield steel in his constituency will get its fair share of contracts from the £96 billion investment in railways, including bridges and other infrastructure projects.

Steel uses a significant amount of energy and is currently facing unprecedented cost increases due to volatile electricity prices, with an eye-watering £2,080 per megawatt-hour last Monday compared to the 2020 average of £35. The high costs are crippling steelmakers' operations in Scunthorpe, making it challenging for them to compete internationally without government support. Asked my hon. Friend to comment more on the lower prices in the steel industry, highlighting that despite lower prices, they remain at a significant disadvantage compared with competitors in the EU.

The steel industry faces significant challenges due to high energy prices and international competition, putting thousands of jobs at risk. UK electricity costs for large industrial consumers were higher than any EU member state in 2020, with the cost difference between Germany and UK estimated at £54 million in 2021 and £254 million over five years. The sector has already received £480 million compensation from 2013 to September 2020 but needs further support for hydrogen technology as part of the green transition.

I declare an interest as a proud member of trade unions representing steelworkers. Industrial energy prices cost UK steel producers £50 million annually before the pandemic, costing the sector £250 million more than French and German counterparts over five years. Energy costs for medium-sized steel rolling mills in Wales have almost quadrupled in the past year. Steps taken by Spain and Portugal to support their steel sectors are highlighted as examples of tangible government support.

The UK should take pride in its energy-intensive industries, which account for a significant portion of the country's manufacturing and industrial sector. Jim Shannon highlighted the importance of supporting these industries to meet net zero carbon targets, using Bombardier Spirit AeroSystems' waste-to-energy project as an example. He also noted that additional funding is essential for decarbonisation and attracting global firms to invest in the UK. Asked if the Minister has visited Shorts Bombardier Spirit in Belfast and discussed their £85 million project aimed at developing aerospace manufacturing.

Mr Jonathan Gullis praised the contribution of his colleague, focusing on the ceramics industry in Stoke-on-Trent. He highlighted Lucideon's £18 million award and called for all Government Departments to use Stoke-on-Trent's world-leading ceramics as a symbol of support. Gullis also discussed the impact of the pandemic and rising energy prices on Steelite International, which lost 95% of its turnover in April 2020 due to lockdowns and failed to qualify for rates relief offered to hospitality businesses.

My hon. Friend is giving an excellent speech, emphasising that steel is not a sunset industry but at the cutting edge of innovation with new alloys being developed. He expressed concern over the impact of high energy prices on UK steelmaking, noting that November 2021 electricity prices peaked at £2,000 per megawatt hour, 50 times higher than the 2020 average. He called for compensation measures such as a carbon price floor and exemptions from renewable levies to level the playing field with European competitors.