Ken Skates AM, Minister for Economy and Transport and Kirsty Williams AM, Minister for Education

First published:
26 March 2019
Last updated:

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This Statement is to update Members on the Welsh Government’s support in relation to steel research and development. 

On 11 February 2019, we were delighted to hear that Swansea University was appointed the lead University in a £35 million project called SUSTAIN to research and innovate steel making and the steel supply chain to ensure steel can become sustainable in Wales and the UK.  This project is supported by a £10 million investment from the Engineering and Physical Sciences Research Council, with the rest of the funding coming from steel companies, university partners, trade bodies and the Higher Education Funding Council for Wales. Tata, Celsa and Liberty Steel are all partners in the network.

This funding builds on Welsh Government investment of over £2 million to establish the Steel and Metals Institute (SaMI) in Swansea University which opened in February 2018. Our investment in SaMI was also designed to establish Wales as one of the major centres of steel and metals research in the UK and to help to lever and secure further investment from wider Government and industry sources.  Since its launch, the Institute has been awarded an additional £3 million of funding from the Higher Education Funding Council for Wales (HEFCW) to focus on smart steel processing and high value products such as electric powered vehicles, energy-efficient buildings and sustainable packaging. We would like to congratulate Swansea University on delivering on this ambition through the funding it has since attracted.

Decarbonisation is at the heart of our new Economic Action Plan. The industrial sector accounted for 29% of Welsh emissions in 2016. Industrial emissions in Wales are dominated by iron and steel production and petroleum refining. There is an increasing focus within the steel sector and within Welsh Government on the importance of decarbonisation.  We are required by law to reduce our emissions by at least 80% by 2050 and this will require very significant changes to how we all live and work.

The Steel and Metals Institute at Swansea University will bring together industry and academia to work on common challenges, rapid product development and increase R&D in businesses.  The Institute provides a valuable resource for companies to develop and test new products and processes with applications in automotive, construction, packaging, electrical steels lifting and excavating, energy and power, and aerospace as well as considering decarbonisation. 

This is in addition to other successes Swansea University has had in the last 12 months which strengthens its links with the steel industry and wider advanced materials in Wales.

The University has won a prestigious Engineering and Physical Sciences Research Council (EPSRC) Centre of Doctoral training in coatings.  These are industrial sponsored PhDs in engineering which build on European funding (European Social Fund) already invested in the Materials Academy (M2A) and offers high level training in cutting edge areas such as modelling and coatings. European funding is enabling the University to increase the cohort of graduates this year. Historically individuals with Engineering Doctorates have progressed to senior positions in industry and it is estimated there are now 120 working in South Wales.

Tata has also collaborated with Swansea University and Warwick University with £7m funding for a Prosperity Partnership to successfully bring a virtual factory approach to steel making. Prosperity Partnerships are EPSRC's flagship approach to co-investing with business in long-term, use-inspired, basic research. They are five-year, multimillion pound research collaborations on topics of national and global importance which have been co-created by leading UK universities and businesses with a strong research presence in the UK. 

Collectively these initiatives provide a substantial resource for Wales and reinforce our position as a region with progressive steel and metals research capability helping to secure a more sustainable future for the sector.

Access and use by industry is essential for these research facilities to remain sustainable and for public investment to be converted into economic value.   SaMI is operated as an open access facility with the intention that it will secure contracts with both long term industrial research partners and ad hoc contracts with companies including small and medium sized businesses.  We are working with Industry Wales to look at how we can support Swansea University in promoting SaMI and other facilities and networks including SUSTAIN to manufacturing businesses in Wales.

Wider initiatives based in Swansea University and also relevant to the steel sector include a £35 million engineering research institute called IMPACT, a £22.7 million Advanced Sustainable Manufacturing Technologies called ASTUTE and a £9.2 million project looking at reducing industrial carbon emissions called RICE. All of these projects have been supported by EU funding through the Wales European Funding Office.

This is in addition to other projects, notably FLEXIS looking at Flexible Integrated Energy Systems, led by Cardiff University and which is working directly with Tata to develop ideas that in the long term will reduce emissions and improve the energy efficiency of the plant.

The level of Innovate UK funding secured for Wales has risen significantly, from £6.6 million in 2011 to £159 million overall.  In the last year the Industrial Strategy Challenge Fund has seen 36 successful projects from Wales across a range of technologies and sectors, totalling £44 million. £36 million  was won by Swansea University to establish an Active Building Centre in Swansea, this is harnessing the experience and cutting-edge ‘active buildings “know-how of SPECIFIC, led by Swansea University, of which Tata is a strategic partner. The Active Building Centre will accelerate the adoption of this concept, working on demonstrators and helping create a new industry.

We work closely with businesses and universities in Wales and Innovate UK to access funding available from Innovate UK and the UK Industrial Strategy.  We raise awareness of funding opportunities and regularly host briefing events for industry and universities to come together and build consortia.  We will continue to work with organisations to maximise these funding opportunities.

In addition, and vital to the success of these initiatives and the future of the steel industry in Wales, is a skilled, motivated work force able to embrace the new manufacturing technologies and product innovation. By supporting our schools, colleges and apprenticeship programs we are working toward building this skilled, adaptable work force. 

We are investing £116million in apprenticeships delivery during the 2018/19 contract year and remain on track to meet our commitment of 100,000 all-age quality apprenticeships by the end of this Assembly term in 2021. We are also investing in Higher and Degree level apprenticeships particularly in science, technology, engineering and maths (STEM) and technical areas which will address the technical skills gaps at levels 4 and 5 (HNC/D equivalent), a degree apprenticeship in Engineering and advanced manufacturing will also be available to employers from April 2019. 

The Welsh Government has always recognised the importance of the steel sector to the Welsh economy and its role as a key investor in training and research and development.  We are pleased that our vision for the steel sector has developed so quickly. It has become an exemplar of how the Welsh Government’s approach to innovation and collaboration will benefit our businesses, our universities and our people.

Given the considerable investment the Welsh Government, Higher Education Funding Council for Wales and Wales European Funding Office has made to research programmes relevant for the sector, we now also have the potential to become a global leader in steel and metals innovation. It is vital that industry continues to make full use of these investments by working with the University sector to develop a sustainable research infrastructure.