Green Policies, Not Trump Tariffs, Killing British Steel

By Vijay Jayarj

British Steel, the U.K.’s last bastion of primary steelmaking, announced plans to shutter its two blast furnaces at Scunthorpe, effectively ending 150 years of virgin steel production in Britain. Media outlets have rushed to pin the blame on U.S. President Donald Trump’s recent 25% tariffs on steel imports.

But this narrative is a convenient distraction from a far more insidious culprit: the U.K. government’s relentless pursuit of self-destructive green policies that have crippled British manufacturing for nearly a decade.

During the Industrial Revolution, Britain’s steel industry forged the island’s ascent as a global superpower. Steel was the sinew of progress, enabling the nation to outpace rivals and cement its economic and military supremacy well into the 20th century. Once the backbone of its industrial might, steel manufacturing has been suffocated by exorbitant energy costs and uncompetitive pricing – both direct consequences of a cult’s dogma that prioritizes reducing emissions of harmless carbon dioxide over economic survival.

Having produced over 20 million metric tons annually in the 1970s, output dwindled to a paltry 4 million tons by 2024. Meanwhile, imports have surged to 68% of domestic consumption, up from 55% in 2022, as cheaper foreign steel floods the market. The government’s pledge to “rebuild” the sector rings hollow when its own policies paved the way for this collapse.

British Steel’s owner, Chinese-owned Jingye, cited “highly challenging market conditions, the imposition of tariffs, and higher environmental costs” as reasons for the Scunthorpe closure, which threatens up to 2,700 jobs and could commence as early as June.

This shutdown is not a sudden reaction to external trade pressures but rather the inevitable outcome of a self-inflicted death spiral. While China and India make cheaper, carbon-intensive steel with no apparent “climate guilt,” the U.K.’s obsession with net-zero “virtue” turns its producers into sacrificial offerings at the green altar.

Green Policies: The Silent Assassin

Let’s dispense with the pleasantries: Britain’s green policies are more a national suicide than a noble crusade. For nearly a decade, successive governments have chased emissions targets with a zeal that ignores the realities of industrial survival. The Climate Change Act of 2008 set the stage, committing the U.K. to slash carbon dioxide emissions by 80% by 2050 – a hideous impossibility that was later tightened to the holy grail of the even more stringent “net zero.”

This ambition birthed a web of regulations, taxes, and subsidies that have jacked up energy costs to levels unmatched among Britain’s peers and made steel manufacturing impossible without incurring heavy losses.

One proposed solution was a shift to electric arc furnaces, which recycle scrap steel rather than producing it from raw materials with more carbon-intensive blast furnaces. However British Steel’s Chinese owner reportedly sought a $1.3 billion subsidy to fund the $2.6 billion change.

In addition, the U.K.’s industrial electricity prices are approximately 40% higher than France’s and about four times more than those of the U.S. For energy-guzzling steelmakers, such price differentials – a product of “green” energy choices – are a death sentence.

Adding to the pain of British Steel is the U.K. Emissions Trading Scheme that adds costs to the company’s emissions of carbon dioxide, a penalty largely evaded by Chinese and Indian rivals.

The world’s steel leader, China produces more than 1 billion metric tons annually – exceeding the U.K.’s total output over the past 47 years. India follows closely, churning out the metal at prices Britain can’t match.

The steel industries of China and India are fueled by cheap coal and minimal constraints on carbon dioxide emissions. Neither faces the punitive energy costs or emissions taxes that hobble British Steel. While the U.K. levies up to $103 on each ton of carbon dioxide emitted, China charges its manufacturers but a fraction of that. India has no national charge at all. The result? British Steel, saddled with green compliance costs, is priced out of the global market.

China and India didn’t need to lift a finger as Westminster policymakers chased a utopian vision that delivered industrial ruin. The media can spin its tariff tales, but the truth is plainer: Britain’s steel industry was slowly bled dry by a government too enamored with green dogma to see the carnage it wrought.

The demise of British Steel serves as a stark warning to manufacturing giants in Western Europe and the U.S. Trading cost-effectiveness for climate compliance is a Faustian bargain to be resisted by corporate executives and lobbyists.

This commentary was first published at RealClearWorld on April 4th, 2025.

Vijay Jayaraj is a Science and Research Associate at the CO₂ Coalition, Arlington, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India.