Business Secretary Peter Kyle has expressed firm confidence in a future for Scunthorpe built around electric arc furnaces (EAFs), despite mounting fears over job losses and the loss of the UK’s primary steelmaking capability. “I do,” Kyle responded, when asked if he believed the green technology would be installed at the plant.
This strong backing is the clearest signal yet of the government’s direction for the state-controlled British Steel site. A new steel strategy, set to be published in December, will formalise this plan, which aims to secure the plant’s future and drastically cut its carbon emissions.
The plant’s current blast furnaces are major polluters but employ thousands of workers. The transition to EAFs, which melt scrap steel, threatens these jobs directly, a fact unions are keenly aware of after 2,500 redundancies at Port Talbot’s Tata Steel following a similar move.
This move also represents a major strategic trade-off. By decommissioning its last blast furnaces, the UK would lose its “primary steelmaking” ability—the capacity to make virgin steel from iron ore. This is a capability the government had previously, and repeatedly, pledged to protect.
To bridge this gap, a high-tech solution using green hydrogen to create Direct Reduced Iron (DRI) is being considered, but it faces significant financial viability questions. All this is happening while the government’s £2.5bn steel fund is being depleted by operational costs, adding pressure to find a workable solution.