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Introduction

To compare current steel production costs globally, showing how the electricity policies outlined in this strategy could improve UK competitiveness, a high-level analysis of global steel production costs has been conducted.

As this strategy sets out the policy measures, investment priorities and innovation pathways needed to achieve a transition to electric arc furnace (EAF) based production, only illustrative EAF costs are estimated for the UK.

Methodology

Underlying cost components are based on , adapted to 2024 £GBP. This report and data set provide comprehensive asset-level estimates of steel plant production costs globally, with 473 sites across 13 countries analysed.

The illustrative EU and non-EU EAFs and blast furnaces are based on average of country-level cost data within each region.

As the UK is not included within this report, underlying cost data is based on average of EAF costs in the EU from the TransitionZero and global efficiency intelligence report. This is with the exception of electricity costs.

Electricity

Due to the change in electricity prices since the publication of the report, electricity costs from the TransitionZero data set are replaced using electricity prices from the published 2024 Baringa work for the Department for Business and Trade (DBT) and the Department for Energy Security and Net Zero (DESNZ). That is, the DBT analysis on Great Britain’s network charges from the consultation on network charging compensation scheme for energy intensive industries.

To do this, £/²Ñ°Â³ó electricity costs are adapted to a £/³Ù crude steel using an energy intensity of factor of 0.435 for EAF and 0.178 for integrated blast furnaces. These factors are sourced from steel on the net cost models and are in line with other publications such those from the Materials Processing Institute (MPI) and Joint Research Centre (JRC).^{[footnote 1]}