The Government is coming under increasing pressure to scrap green charges that contributed to the closure of the Redcar plant.
The Teesside site, which has produced steel for 160 years, will be mothballed with the loss of 1,700 jobs, its Thai owners SSI UK announced yesterday.
Another 4,000 jobs are expected to be lost among contractors on the site and in the supply chain.
Unions called the move ‘devastating’. SSI said there was no other option but to shut the site after steel prices halved.
Production was halted earlier this month while the Thai group reviewed its options.
Yesterday trade body UK Steel called on ministers to remove hefty green charges that steel plant owners are forced to pay on top of their electricity bills.
Under climate change rules, factories must source part of their power from renewable sources, which are more expensive.
The industry estimates this adds £8 to the cost of a ton of steel – a cost that is bearable when prices are high, but ruinous now they are lower than £200 a ton.
Gareth Stace, director of UK Steel, said: ‘Sympathy and warm words are welcome, but ministers must now get behind British steel and deliver the support that we urgently need.’
He called on the Government to ‘create a level playing field for British steel by fully compensating the industry for the high cost of electricity caused by the imposition of climate change policies’.