Business Secretary Peter Kyle has expressed support for transitioning to cleaner electric arc furnace technology at the state-controlled British Steel plant in Scunthorpe, Lincolnshire. The move would secure steel production at the site, which has been under emergency state control since April, but raises questions about the future of the UK's last remaining blast furnaces.
Kyle stated the government is 'keen to see that transition happen' as it works on a new steel strategy expected in December. The shift aligns with the UK's net zero carbon emissions target, but it casts doubt on the fate of blast furnaces employing thousands and on previous pledges to preserve primary steelmaking from iron ore.
The government recalled Parliament in April to take control of British Steel, fearing its Chinese owner, Jingye Steel, planned permanent closure with up to 2,700 job losses. Ministers have not yet outlined long-term plans for Scunthorpe. The government set aside £2.5 billion for the steel industry in its election manifesto, but Kyle confirmed hundreds of millions have already been spent to keep British Steel and Liberty Steel operational.
Kyle noted the global steel industry faces crises including US tariffs and Chinese oversupply. Using funds for operational support likely means less for capital investment. Asked if he expects electric arc furnaces in Scunthorpe, Kyle replied, 'I do,' promising more details in the steel strategy.
Steelworkers are cautious after Tata Steel cut 2,500 jobs at Port Talbot while switching to electric arc furnaces. The plan also requires a deal with Jingye to walk away. A move from blast furnaces raises concerns about the UK's ability to produce virgin steel, as predecessor Jonathan Reynolds stressed preserving 'primary steelmaking'.
Union official Alasdair McDiarmid welcomed the government's commitment to a just transition but stressed maintaining primary steelmaking capacity. The government is considering investing in direct reduced iron (DRI) production using clean hydrogen, though industry sources doubt its financial viability. UK Steel's Frank Aaskov called for lower power prices and robust trade policies.
