Current State of The UK Metals Industry
The UK metals sector is integral to the nation’s industrial base and to achieving the government’s ambition of a net zero economy. Yet despite significant progress and investment from businesses across the supply chain, structural barriers continue to impede growth, competitiveness, and sustainability.
Energy-Intensive Industry (EII) Classification: A Critical Policy Gap
Energy remains one of the most significant input costs for metals businesses, with some firms reporting that energy accounts for up to 50% of operating expenditure. However, the current framework for Energy Intensive Industry (EII) classification excludes many genuinely energy-intensive operations.
This misalignment results in certain companies being denied access to reliefs and exemptions from network charges and taxes—measures specifically designed to protect such industries. Addressing this inconsistency must be a policy priority. Trade associations and the UK Metals Council continue to provide government with evidence-based case studies to illustrate how the existing definitions fail to capture the sector’s realities.
Infrastructure and Grid Capacity: Unlocking Investment Potential
The sector has demonstrated its commitment to sustainability by investing in on-site renewable generation, including large-scale solar photovoltaic arrays. These initiatives not only reduce carbon footprints but also enhance energy security. However, in many cases, companies are unable to export surplus power back to the grid due to inadequate infrastructure and grid capacity constraints.
This creates a structural contradiction: while industry is encouraged to decarbonise, the supporting infrastructure is not sufficiently developed to accommodate the transition. Investment in grid resilience and capacity must therefore be accelerated to ensure that industry-led sustainability projects can deliver their full potential.
Rising Costs and the Need for Long-Term Certainty
Metals producers also face mounting pressure from non-commodity charges and new taxation measures, compounding the volatility of energy markets. For many small and medium-sized enterprises, these costs are not just a challenge but a risk to long-term viability.
Larger organisations often have dedicated teams and resources to manage sustainability strategies, but SMEs frequently lack the capacity to navigate complex and evolving policy frameworks. Here, the UK Metals Council and sector associations provide critical support, helping to interpret regulation, advocate for fairness, and articulate the business case for sustainable investment.
The Path Forward: Policy, Partnership, and Practicality
The metals sector is ready to lead on net zero. Businesses are already investing, innovating, and adapting. However, for this leadership to be realised at scale, three priorities must be addressed:
Reform of EII criteria to ensure all genuinely energy-intensive firms can access essential support.
Investment in national grid infrastructure to enable the export of clean, renewable power generated by industry.
Clearer policy signals and long-term certainty to help businesses justify and sustain green investment.
By working in partnership with government, the UK Metals Council and industry associations will continue to ensure that the sector’s voice is heard, that policy reflects operational realities, and that UK metals remain globally competitive in the transition to net zero.
