UK Steel has criticised BP’s procurement decision on the Net Zero Teesside project after reports emerged earlier this month that around 7,000 tonnes of steel – worth an estimated £5 million – have been ordered from a Chinese supplier.
The decision has raised concerns across the UK steel supply chain because Net Zero Teesside is one of the country’s flagship decarbonisation projects and is supported by substantial public funding. The project, led by BP, aims to deliver a gas-fired power station with carbon capture and storage and is intended to anchor clean-energy investment and jobs in the Teesside region.
UK Steel argues that awarding the contract overseas highlights a structural problem in the way publicly backed infrastructure projects translate policy ambitions into procurement practice. Domestic producers, including British Steel, operate close to the project site and have both the capacity and technical capability to supply the material, according to the trade body.
Responding to the reports, Gareth Stace, Director-General of UK Steel, said BP’s choice “beggars belief” and described it as “deeply disappointing” for a taxpayer-supported project. He pointed to the contrast between the government’s stated ambition to strengthen domestic supply chains and treat steel as a strategic asset, and the reality of major contracts being placed abroad despite UK availability.
Stace added that where projects benefit from public mechanisms such as Contracts for Difference, “sponsors must be expected to align with Government policy in practice, not just in principle,” warning that offshore sourcing risks exporting value, jobs and strategic capability at a time when industrial resilience is meant to be a priority.
UK Steel said it continues to welcome the government’s broader policy direction on economic resilience and industrial strategy, but stressed that clearer procurement expectations – and enforcement – are needed if the UK is to capture the full industrial benefit of its net-zero investment programme. The organisation said it remains ready to work with government and project developers to ensure future projects translate public support into demand for British steel.
Source: UK Steel, Photo: Fotolia