The low-carbon transition is complex and far-reaching. It requires collaboration across governments, industry and the workforce over the coming decade and beyond. In the short term, some improvements can be made—improving energy efficiency and resource efficiency, for example. However, the significant reductions in emissions required can only come from major shifts in production processes and consideration of the potential for new technologies such as carbon capture and storage, fuel switching to electricity and longer term to hydrogen. The appropriate low-carbon pathway and mix of technologies for our steel-producing companies is being considered by employers, trade unions and governments. Whichever path is taken will require major investment within individual production plants and in wider energy production and infrastructure.

One of the greatest challenges to reaching net zero across the economy is the change needed to electricity supply. The Climate Change Committee has advised us that we need to reach near-zero greenhouse gas emissions from electricity by 2035. At the same time, various projections suggest that the electrification of transport, buildings and industry will mean electricity demand in Wales will more than double by 2050. Decisions taken by the steel industry on its decarbonisation pathway will have a huge impact on our electricity needs.

Our pathway to a net-zero Wales will be challenging, but it will offer opportunities for sustainable growth and more resilient businesses. We live in a world where economies are already prioritising decarbonisation. By taking a more efficient approach in how we use resources, we can shorten supply chains and boost economic resilience. Producing the lower carbon products that we need means that more economic value can be retained here in the Welsh economy. For example, we’ve invested £1 billion in recycling infrastructure that collects materials, including steel, from every home in Wales. We are also bringing forward requirements on businesses to separate their recycling, and that will also support the supply of recycled steel for reuse.

This is a challenge the steel sector cannot meet in isolation, though. Industry as a whole has come together through the South Wales Industrial Cluster and has been awarded funding through the UK industrial decarbonisation challenge. We’re working closely with those industries on their holistic approach to the transformation of industry for a net-zero future. Developments are also accelerating in the potential for hydrogen infrastructure to be deployed across Wales, and in particular north Wales, at present. This includes cross-border engagement with HyNet in Ellesmere Port, who are developing a hydrogen and carbon capture and storage integrated network in north-west England and north-east Wales.

To provide the low-carbon energy we need we’re also committed to looking at opportunities to develop marine renewable energy and to supporting innovation in new renewable energy challenges, including the tidal lagoon challenge. We are working closely across the offshore renewable energy sector, particularly offshore wind and marine energy. There are already 4 GW of fixed offshore wind in planning or development off the north Wales coast, and these projects are likely to be developed by the early 2030s. Whilst this is significant, in the short term it is not enough to unlock the required infrastructure investment. This requires the support of the UK Government with the development of a market pipeline in tandem with associated financial tools and enforcement of the 60 per cent UK content rule to underpin local delivery of value-added goods and services.

I was pleased to hear a firm commitment from the UK Government department, the Department for Business, Energy and Industrial Strategy, at the Steel Council on 19 May to support the sector with its key challenges, including energy prices and decarbonisation. It’s a simple fact that the UK Government holds many of the powers related to industry decarbonisation, including the business models for developing hydrogen, carbon capture and storage, the cost of electricity, and key market drivers such as a potential carbon border adjustment mechanism. We will continue to do all we can to work with them, and the trade unions, to ensure that our steel companies in Wales remain as competitive as possible.

We will continue to work with the UK Government, with businesses and trade unions to ensure that our steel industry is modern, competitive and fit for the future. The talented workforce we have here in Wales drives the success of the UK steel industry, and we'll work in partnership to pave the way for a fair transition. Llywydd, with much progress to make and so much at stake, we do need to see early action from the UK Government. The next meeting of the UK Steel Council, this year's comprehensive spending review, and COP26 now represent key tests for the UK Government and their practical commitment to the sector and its future.

I was also pleased, though, with the UK Government's decision last week to make new regulations to defend the UK steel industry with a temporary extension of steel safeguard measures. The initial decision from the Department for International Trade seemed to me to be at odds with the direction and support given by the Secretary of State at BEIS. I welcome the change of heart and reversal of the position of the Department for International Trade to ensure that safeguard measures remain in place, as they do within European Union countries. That should help to avoid steel dumping into the UK.

Since becoming the economy Minister for Wales, I've made it clear to the UK Government that extending existing steel safeguards was absolutely vital in order to protect the UK steel industry. The solutions to many of the challenges facing the steel sector are complex and will need to be transformational. I will continue to champion the sector and look forward to working collectively with the industry, the workforce, and the UK Government on the transformational technologies, infrastructure and market drivers that will underpin the operation of the sector and all of our businesses to meet our longer term net-zero aspirations.