Trade body UK Steel has launched a report that finds a “vast chasm” between UK energy prices for industry and those in Europe.

It found that steelmakers in the UK pay nearly two times as much as those in Germany and France, partly due to higher grid connection costs in the UK. China has also been accused of dumping cheap steel on the global market to beat out competitors.

Steel production’s energy-intensive nature leads to high electricity consumption, and these costs can represent up to 180 per cent of steel producers’ gross value added (GVA) in the UK.

The warning comes just two months after Port Talbot, which is owned by Tata Steel, announced as many as 3,000 job losses, as well as a plan to transition to producing low-carbon steel with electric arc furnaces.

The switch to electric arc furnaces is expected to double the sector’s electricity consumption. The move is considered to be essential for the UK to meet its 2050 net zero carbon ambitions. Port...