Combining economic and environmental dimensions: Value chain analysis of UK iron and steel flows

Abstract

This paper presents the methodology of value chain analysis developed for a study which combined a material flow analysis of the UK iron and steel sector with a consideration of the economic dimension of those material flows, in order to shed light on concepts such as resource productivity and dematerialisation of the economy. The methodology is used in this paper to map the current value chain of iron and steel flows through the UK, noting the high value of scrap arisings at different stages of the production and use chain, and the substantial cost of disposing of iron and steel as waste; to examine the residual outputs generated by this industry and the value of applying industrial ecology principles; to contrast the environmental impacts of different categories of materials with their values; and to discuss the findings in terms of the global environmental burden of this sector of the economy, with particular attention paid to international trade aspects. It was found that while imports are substantial, net imports are, in terms of both weight and value, a rather small part—just under 20%—of total UK iron and steel production and use (defined as domestic production plus net imports). The findings show that value chain analysis is a robust methodology for exploring various aspects of the economy–environment interface, and a useful complement to material flow or life cycle analyses with a potentially very widespread applicability. The value chain analysis also provides a framework for coherent and integrated responses by industry as well as policy-makers, through its focus on linkages within different stages and actors in a chain and on the potential for systemic efficiencies.