Low-carbon reorientation in a declining industry? A longitudinal analysis of coevolving contexts and company strategies in the UK steel industry (1988–2022)

Abstract

To assess the speed and directionality of low-carbon transition processes in the UK steel industry, this article makes a longitudinal analysis of changing external pressures and company response strategies over the last 34 years. Using the Triple Embeddedness Framework and a five-phase model of reorientation, the study finds that the steel industry's low-carbon reorientation strategies moved from inaction (phase 1 in our model) and incremental change (phase 2) in the 1988–1997 period, to hedging and exploration of technical alternatives (phase 3) in the 1997–2007 period, back to incremental change in the 2007–2015 period (phase 2), and then forward again to hedging and exploration of technical alternatives (phase 3) in the 2015–2022 period. The reason for this oscillation pattern is that economic decline and successive retrenchment strategies reduced managerial attention and organizational resources for low-carbon orientation, especially after the 2007/8 financial crisis which led to a survival-focus. In recent years, UK steelmakers have started to explore three decarbonisation pathways (scrap/electric arc furnaces, carbon-capture-and-storage, and hydrogen direct reduction) but have not yet committed to their deployment, which is why reorientation speed is limited. New economic headwinds in 2021/2 threaten the implementation of low-carbon visions and roadmaps, leading steelmakers to ask for more government support. Future shifts to phase 4 (deployment and diversification) and phase 5 (full reorientation) in our conceptual model will depend on the outcome of currently ongoing political negotiations.