Heinz-Juergen Buechner, managing director for automotive and industries at IKB Deutsche Industriebank, has said that if Britain leaves the European Union Emissions Trading System (ETS), it could boost the British steel industry.
More than three of every four UK steel products were exported to the EU in 2018. If Britain left the ETS this could reduce the cost of British steel and increase sales. Buechner says that after Britain leaves the ETS there could be greater investment in high-quality steel, and tariffs on imported steel would protect British steelmakers.
Faced with uncertainty over Brexit, steel production in the UK has fallen in 2019, but Buechner believes that it could rise if a no deal Brexit means that Britain leaves the ETS
The largest steelmaker in the UK is Tata Steel, which employs 8,000 people. Buechner says:
“The further development of the UK steel production strongly depends on the development of Tata’s steelworks.”
The ETS is a carbon emission trading policy designed to combat climate change by reducing greenhouse gas emissions. Leaving the ETS system could make steel cheaper to produce, but it is a strategy that may not be popular with people concerned about climate change unless other carbon reduction policies are introduced.
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