We've waited patiently for the publication of the UK's Steel Strategy and at first glance it appears to be the most interventionist and assertive industrial policy direction for steel in decades.

From a FISC standpoint, representing cross sector collaboration in cement, glass, metals, ceramics, paper and chemicals, the strategy provides a welcome recognition of steel's centrality to the foundation industries and the wider economy.

However, while the direction is promising, achieving true market transformation will require broader innovation commitments, deeper cross industry alignment, and long term certainty that goes beyond trade protections and capital injections.


1. Innovation: A Step forward, but not yet a systemic leap

The Strategy strongly signals a national pivot toward electric arc furnace (EAF) steelmaking with majority recycled feedstock as the technological future of the sector, emphasising a shift away from blast furnaces in pursuit of cleaner, more flexible production.

The UK is already transitioning to the exclusive use of EAFs, with the British Steel site in Scunthorpe being the only remaining site utilising blast furnaces.

However, from a FISC perspective the strategy focuses heavily on deployment and the transition to EAF based production but is lighter on stimulating upstream innovation, such as:

• industrial symbiosis across the foundation industries (e.g. use of waste heat, by product valorisation, cross sector circular materials streams)
• next generation scrap upgrading technologies
• hydrogen ready Directly Reduced Iron (DRI) pathways, and
• digitalisation (AI driven yield optimisation, predictive maintenance)

The commitment of up to £2.5bn via the National Wealth Fund signals a willingness to invest, but it doesn't carve out a ring fenced innovation fund specifically targeting frontier steelmaking technologies or cross industry decarbonisation breakthroughs. The approach is, in essence, an industrial survival strategy, not yet a technology leadership strategy.

For the UK to achieve long-term competitiveness, support for R&D at TRL1-9, must be more explicit, with a clear mechanism for funding, and aligned with the needs of the full foundation industries landscape.


2. Market Readiness: Protectionism to stabilise not a long-term solution

The most striking component of the strategy is the new trade protection framework of:
• a 60% reduction in import quotas from July 2026
• a 50% tariff on steel imports above the new quota thresholds
• measures explicitly aligned to recent EU, US, and Canadian actions

From a FISC standpoint, these protections:
• provide critical breathing room for domestic producers to invest in modernisation
• reduce volatility created by subsidised imports that currently undercut domestic prices
• improve the investment case for upgrading ageing facilities and supply chains

However, risks remain:
• Trade protections can stabilise a sector but cannot substitute for competitiveness in the medium term.
• Downstream industries might face cost pressures especially automotive, construction, and machinery if domestic supply is not rapidly scaled with high-quality, competitively priced alternatives. A concern echoed in Parliament and ongoing industry commentary.
• The strategy doesn't detail how the UK will ensure price stability, scrap availability, or energy cost parity with EU competitors, key factors that currently hinder market readiness.

Without a full-spectrum competitiveness plan, the UK risks building a protected but not yet globally competitive steel ecosystem.


3. Recognition of steel's importance to the UK industrial ecosystem

The strategy recognises steel's foundational role in advanced manufacturing, clean energy, defence, construction and digital technologies and the role it plays in security and economic resilience with regionally important economies from Port Talbot to Scunthorpe and Teesside.

For the first time this reflects an improvement over policy eras that treated steelmaking as a sector to be "managed through decline."

FISC especially welcomes the reinforcement of:
• strategic supply chain sovereignty
• the role of steel in enabling net zero infrastructure, and
• the interconnectedness across the foundation industries
• new government-sponsored working group for circular economy metals which brings steel, aluminium, other non-ferrous and critical metals together


4. How this compares with previous UK steel policies

Earlier strategies (pre-2006) were:
• fragmented and reactive, often responding to crises at individual plants (e.g., Redcar, Scunthorpe)
• lacking long-term industrial vision and failing to address structural challenges such as energy costs or global overcapacity
• much less interventionist and far more market led

In contrast, the new 2026 strategy is:
• highly interventionist, using trade measures unprecedented in recent UK policy
• clearer in long-term intent, particularly on decarbonisation and domestic production targets
• better aligned with international industrial policy trends, especially the EU and US

However, where previous strategies lacked vision, the new strategy now needs to flesh out a workable delivery plan, especially around innovation ecosystems, holistic thinking and cross-sector synergies.


5. Alignment with other current UK industrial and economic strategies

The Steel Strategy connects (implicitly) with several other major frameworks including:
• the Industrial Strategy emphasising strategic sectors and resilience
• net zero and clean energy commitments: The shift to EAFs aligns with decarbonisation, though hydrogen/DRE isn't yet deeply integrated
• critical minerals and advanced manufacturing policies: downstream industries (wind turbines, EVs, defence systems) depend on high-quality domestic steel
• the National Wealth Fund provides a cross-sector investment vehicle supporting green industrial transformation
• the Welsh National Investment Plan

However, there is no explicit alignment with the 2030 Hydrogen Strategy, UK Net Zero Strategy, or Materials Innovation initiatives.

6. What's still missing for UK industrial growth

Despite real progress, at FISC we feel several critical growth enablers are not fully addressed:
• Energy cost competitiveness. UK steelmakers face industrial electricity prices that are 14% higher than Germany and 25% higher than France. Without addressing this, EAF-based steel risks being uncompetitive even with tariffs.

• FI cross sector collaboration. The strategy doesn't highlight shared decarbonisation infrastructure such as hydrogen networks or CCUS clusters, resource efficiencies such as slag, heat recovery or shared logistics, or joint workforce or digital innovation programmes.

• Scrap quality and circularity strategy. We need a national plan for scrap upgrading contamination reduction and large-scale circularity infrastructure essential for EAF dominance.

• Skills and workforce transition. Job losses at blast furnace sites are acknowledged but there is no detailed reskilling roadmap or transition support plan for regional economies.

• Long-term demand signalling. While supply-side measures are strong demand-side certainty is weaker. Though improvements to procurement commitment are mentioned this remain limited with no explicit commitments on quotas for UK-made steel.

• Innovation ecosystem development. Without a dedicated innovation mission comparable to Germany's industrial transformation programmes or the US's Inflation Reduction Act industrial clusters, the UK's progress could be a slow trajectory from "surviving sector" to "global technology leader."


Conclusion
In conclusion, for FISC, the Strategy represents a major and overdue shift in government ambition. It meaningfully acknowledges steel's centrality to the UK economy and provides a stronger platform for domestic industrial resilience than any previous strategy in recent decades.

Yet, to unlock true long-term competitiveness and sector leadership, the UK now needs:
• deeper innovation commitments
• cross-industry decarbonisation alignment
• energy cost reform
• stronger demand-side policy, and
• a clear circular materials strategy

Without these, the strategy risks stabilising the industry but not transforming it.

Published: 30-04-2026