The proposals, which are subject to appropriate support from the UK government, could see British Steel install two electric arc furnaces (EAFs) at its headquarters in Scunthorpe, and its manufacturing site in Teesside. The proposal follows analysis of the company’s current operations, available technology and market conditions.
British Steel said the new furnaces could be operational by late 2025 and would replace the aging iron and steelmaking operations in Scunthorpe that account for most of the company’s CO2 emissions. The company proposes maintaining current operations until a transition to electric arc steelmaking.
British Steel has started preliminary talks with trade unions about electrification, and said it will support employees affected by the decarbonisation plans. It has agreed for its proposals to be reviewed by an external specialist on behalf of the trade unions.
The company is also working with North Lincolnshire Council on a masterplan to attract new businesses and jobs to the Scunthorpe site, parts of which could become vacant if the proposals go ahead.
In a statement, British Steel CEO and president, Xijun Cao, 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.
“We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations. However, thorough analysis shows this is not viable.
“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.”
British Steel unveiled its Low-Carbon Roadmap in October 2021, pledging to invest in technologies to deliver net-zero steel by 2050, and significantly reduce its CO2 intensity by 2030 and 2035. The company is now proposing to accelerate decarbonisation with the potential new operating structure able to reduce its CO2 intensity by around 75 per cent.
Xijun said: “Our desire to dramatically reduce our carbon footprint, coupled with current market conditions, means we can’t wait and need to transform our business as quickly as possible. And while decarbonisation will not happen overnight, it’s imperative we take swift and decisive action to ensure a sustainable future for British Steel.
“We studied having one large electric arc furnace based in Scunthorpe, one which was capable of manufacturing all of the steel we require for our rolling mills in the Humber and the North East. However, such a large furnace would require a new National Grid connection and it is anticipated this would not be available until 2034. We therefore believe the most viable and timely option is to have two smaller furnaces which combine to produce the volumes of steel we require.”
Commenting on British Steel’s announcement, Unite general secretary Sharon Graham said: “There is absolutely no need for mass redundancies at British Steel. We do not accept the need for one single job cut. Taxpayers should not be footing the bill for new investment unless that is linked to binding job guarantees. Only by the government taking a stake in the company will the right choices be made for the UK’s economy.”