British Steel: £1.25bn green furnace upgrade announced as 2,000 job losses feared
British Steel has announced plans to shut its blast furnace in Scunthorpe in its bid to go green with £1.25bn upgrade plans.
It aims to replace the furnace with two electric arc furnaces in Scunthorpe and Teeside – with aims to make the furnaces operational by late 2025.
Electric furnaces are used to recycle steel scrap into new steel, reducing the emissions footprint of production.
Xijun Cao, British Steel chief executive and president, said: “Decarbonisation is a major challenge for our business but we are committed to manufacturing the home-made, low-embedded carbon steel the UK needs.
“Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future. It would also ensure we can provide our customers with the steel they require.
He revealed the plans depend on if the company gets “appropriate support from the UK government,” amid media reports Downing Street plans to support British Steel with £500m in taxpayer funds, mirroring a rescue deal for rival Tata Steel.
“We remain in talks with the government and, with its support, are committed to making the steel Britain needs for generations to come,” he said.
Government sources told the BBC this morning that the the plants in their current state are not economically viable- as they are losing £1m per day and are not considered green.
This means they are considered unsustainable on financial and environmental grounds for further subisides and support.
It currently intends to maintain current operations until a transition to electric arc steelmaking.
However, unions estimates the shift could ultimately lead to the loss of 1,500 to 2,000 jobs, chiefly at Scunthorpe.
British Steel employs around 4,500 people across the UK.
Community Union General Secretary Roy Rickhuss welcomed the company’s push towards “green steel” but warned over uncertainty over roles in the organisation.
He said: “All options for decarbonisation must remain on the table, and Community will do whatever it takes to protect our members interests. With the right commitment from all stakeholders we can deliver a just transition that saves our planet, saves our jobs, and saves our steel.”
When approached for comment, a government spokesperson said: “Our commitment to the UK steel sector is clear, and we continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the sector and its workers.
“We have offered a generous support package including more than £300m of investment for British Steel to cut emissions, help safeguard jobs and unlock over £1bn in stakeholder investment.
“Ultimately, it is for British Steel to manage commercial decisions for the future of the company, and we cannot comment on ongoing commercial negotiations beyond that.”