There was a slew of comment over the weekend regarding the role that Britain’s carbon reduction efforts played in Tata Steel’s decision to sell off its UK operations. A Daily Mail editorial called “the crippling green taxes imposed by Ed Miliband’s Climate Change Act in 2008” a “monstrous handicap” that had driven the steelworks and its 5,000 workers over the precipice. The Spectator’s editorial said “taxes and levies designed to help Britain meet its self-imposed and unilateral carbon-reduction targets, have worsened Tata’s problems in Britain”. These sentiments were repeated by a who’s who of the British climate sceptic commentariat: Dominic Lawson, Christopher Booker and Matt Ridley all sharpened their quills. In Tata Steel’s press release last week, the company blamed “global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency” for its intention to sell off the Port Talbot steel works. Part of steel’s manufacturing costs is, of course, electricity. Which is how we come to be talking about climate policies. There is no doubt that the Port Talbot steelworks is a big energy user. According to reports, it uses as much electricity as nearby Swansea and each year the power bill runs to £60m. But in Simon Evans’ excellent Carbon Brief article, he finds electricity to be between 6 and 8% of the plant’s total production costs. Of this, perhaps 2-3% is due to green policy costs. But because the UK compensates energy-intensive industries for about two-thirds of the impact of these levies, the real cost of green levies at Port Talbot is about 1% of production costs.
Guardian 5th April 2016 read more »