Foreign steel is fuelling Britain’s net zero drive

Wayne Bishop practically bounces around as he walks his steel factory floor, pointing out all the new equipment workers are using.

Here, a CNC machine chops up long L-beams that are fed into the building. Over there, a plasma cutter throws off sparks as it slices through thick pieces of metal.

Just a dozen or so feet away, an apprentice is peering at a high-tech fibre laser, used for the most delicate and precise cutting. “We call [the machines] beauty and the beast,” Bishop grins.

“It’s been massive for us, in terms of productivity.”

The new kit at the Painter Brothers steel fabrication factory in Hereford is sorely needed.

The 105-year-old company has provided steel for aircraft hangars and constructed the futuristic-looking Skylon structure, the centrepiece of 1951’s Festival of Britain on London’s South Bank.

But today its main business is making the structures for electricity pylons – and business is booming.

The last time a major build-out of the power transmission system happened was in the 1960s, when Britain built the “supergrid”.

Now another huge overhaul is happening as part of the shift towards net zero, which is expected to drive the electrification of heating and transport – pushing demand ever higher.

Painter Brothers, which takes steel beams and turns them into structures that can be bolted together into pylons, is already responsible for providing structures for 80pc of the UK’s transmission towers.

But the workload is about to jump higher. An estimated 1,000 miles of new transmission lines are needed to meet net zero targets, equivalent to roughly 5,000 to 6,000 new pylons.

With very large numbers of wind turbines being built off the coast of Scotland, the primary aim is to boost north-south capacity so their power can be sent down to cities in England.

It will involve building new lines through the Scottish Highlands, the Scottish Borders, the North of England and East Anglia, close to where more North Sea wind farms are located.

Painter Brothers has already been doing work for SSEN, which runs the transmission network in Scotland, as well as National Grid.

From 2025 to 2029 alone, National Grid expects to spend a whopping £30bn on such projects.

It’s a huge success story for Painter Brothers, one of two pylon manufacturers in Britain, which expects so much work that it is preparing for a major expansion of its site in Hereford.

The factory’s capacity is about 8,000 to 10,000 tonnes of finished product a year, but a second factory will boost this to between 15,000 and 20,000 tonnes. An extra 25 jobs at the site have also been created, with more to come.

“We’re at 95pc capacity at the moment and going absolutely full tilt,” says Bishop.

There is one minor snag, however, which is that British steel mills are largely missing out on the pylon production.

Of the raw steel coming into Hereford, only 2pc is British. That is compared to 40pc from Spain, 36pc from Turkey and 10pc from Italy. Even Germany and France provided more, at 6pc each.

b’

‘

Bishop says he is speaking to Scunthorpe-based British Steel, which was taken over by the Government this year, about trying to boost these figures.

“I said to them, ‘Do you realise the demand that there’s going to be for the next 10 years?’” he says.

Why, then, is British-made steel currently playing such a small role?

It is a familiar – and some would say depressing – story, given the tiny contribution domestic producers have also made to the construction of thousands of new wind turbines so far, as well as to new warships for the Royal Navy.

Only 2pc of the steel used in offshore wind projects has also been British, a study by consultancy Lumen Energy & Environment for lobby group UK Steel found.

Separate research by UK Steel has also found that domestic demand appeared to outstrip production every year from 2018 to 2024 – suggesting that domestic consumers are simply not buying British.

One reason British suppliers are not considered is price, which has become increasingly difficult to keep under control.

On the one hand, massive oversupply by the likes of China has been swamping global markets with cheap steel for years.

China produced more than a billion tonnes of steel in 2024 and exported some 110 million tonnes – while Britain produced just four million.

On the other hand, British firms also have to grapple with bigger overheads – from carbon taxes and high energy prices to surging labour costs – which make them less competitive than rivals in places like Turkey.

Not to mention Donald Trump’s tariffs on foreign steel, which have emerged alongside a threat from the EU to heavily tax British exports as well.

Against this grim backdrop, UK steel production is at its lowest since the great depression and imports have surged to 70pc of demand.

That has driven calls from steel producers for the Government to “level the playing field” by imposing tougher import tariff quotas, as well as a “carbon border” that would slap bigger taxes on steel made by more polluting foreign plants.

But Jon Harrison, of UK Steel, says the Government must also do more to encourage publicly-funded projects to source steel from domestic producers.

If Britain is to lead the way by pushing ahead with net zero faster than other countries, he argues, doesn’t it make sense for our steel companies to benefit as well?

“All these contracts are already being signed and sealed, and we still don’t have a long-term plan,” he says.

“So we hope the Government and ministers are going to be more muscular in directing public bodies, where public money is being spent, into considering domestic options.”

Under plans put forward by UK Steel, major public projects would be obliged to source at least 30pc of their steel domestically.

But even this is not ideal. A protective measure, it would not address the underlying costs that are making British steel producers less competitive – and would simply raise prices for everyone.

That cost could then be lumped onto consumers, including through their energy bills.

However, Harrison argues it might be worth it in an unstable world.

“In the modern world, given global conditions, I don’t think we can afford to be without a steel industry,” Harrison says.

“We would be the only G20 country that didn’t have its own steel-making capacity, if we just allow things to switch off.”

He says the mood among delegates at a recent meeting of the OECD club of developed countries was that “free trade in steel is basically dead”.

“There are protectionist measures going up all over the world, and the last country to act will be the first to lose its steel industry. So we risk being left behind on this.”

b’

‘

He also believes the Government has a larger role to play in fixing the fundamentals and bringing together companies working on big projects.

The Department for Business and Trade is expected to publish a steel strategy in the coming months. It will aim to give firms a forward view of the quantities needed in different policy areas.

At the same time, ministers have unveiled various schemes to help reduce steel firms’ energy bills.

These will lower electricity prices for steelmakers by as much as 25pc, but it is also an example of shuffling costs around rather than finding ways to lower them.

Gareth Stace, the director of UK Steel, says: “UK Steel always strongly encourages the supply chain to talk directly to domestic steel producers if in doubt about product availability.

“This is vital to protecting jobs and encouraging economic growth in the UK.

“To help the supply chain identify availability of domestically produced steel, UK Steel has developed a digital catalogue for a wide range of products and urges buyers to consult it when making procurement decisions.”

Back in Hereford, Painter Brothers is getting ready for the large pipeline of work coming its way.

The company is also now in talks about a potential supply deal with British Steel, with product trials currently under way.

In the hope of seizing the momentum, British Steel has also since launched a “save steel buy British” campaign to raise awareness about its products. Producers will only hope they can be successful.

A British Steel spokesman said: “We have the capability and capacity to produce these grades of steel – and many others – and are engaging with National Grid on this.

“We recently launched the save steel, buy British campaign, encouraging UK businesses to support British steelmakers like us.

“Every tonne of steel made in the UK drives growth, supports skilled jobs, and keeps supply chains rooted in our communities rather than exported overseas.”

Try full access to The Telegraph free today. Unlock their award-winning website and essential news app, plus useful tools and expert guides for your money, health and holidays.