UK steel suppliers were given some cause for celebration in the Autumn Statement, with the news that the British steel sector is one of the energy intensive industries that will be given permanent exemption from environmental tariffs.

Chancellor of the Exchequer George Osborne made the announcement as part of a number of changes to the UK’s overall approach to energy – including how the topic is managed within government itself.

He explained that DECC, the Department of Energy and Climate Change, will be making a 22% cut to its daily resource budget, while the Renewable Heat Incentive will be reformed to save £700 million too.

For UK steel suppliers though, the exemption from costly energy-based tariffs will help to reduce ongoing production prices, which should come as a boost for domestic steel manufacturing, improving the availability of British steel via steel stockists up and down the country.

“We’re going to permanently exempt our Energy Intensive Industries like steel and chemicals from the cost of environmental tariffs, so we keep their bills down, keep them competitive and keep them here,” Mr Osborne said.

The news means that UK steel producers should be able to expect lower operating costs, free from the penalties intended to be imposed on industries whose energy consumption is excessive – and not those for whom high energy use is a necessity.

In steelmaking, the very high temperatures required to melt the metal so that it can be formed into new and useful shapes mean large amounts of energy are needed too.

However, UK steel stockists help to improve the environmental profile of the industry as a whole, for instance by supplying second hand steel for use in projects where it is appropriate to do so.

Making steel using recycled materials also helps to reduce the total energy used in the process – by as much as 74%, according to figures from the British Metals Recycling Association.