British Steel plans to close blast furnaces, putting 2,000 jobs at risk

British Steel has confirmed plans to shut its blast furnaces in Scunthorpe, putting up to 2,000 jobs at risk.

According to plans, the furnaces will be replaced with two electric arc furnaces (EAF) in Scunthorpe and Teesside which can run on zero-carbon electricity.

The company, which is owned by China’s Jingye Group said the plans are still “subject to appropriate support” from the UK government, but the changes would make British Steel a “clean, green and sustainable” business.

However, unions estimate the changes could lead to the loss of 1,500 to 2,000 jobs, predominantly at Scunthorpe.

Chief executive Xijun Cao told the BBC the firm was not able to keep the blast furnaces and meet environmental commitments. He said:

“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.”

UK Steel, the industry body, said the announcement marked a turning point:

“The UK’s major steel producers are taking crucial steps to decarbonise by 2035,” said its director general Gareth Stace.

The Chinese-owned company said the £1.5bn proposals would reduce British Steel’s carbon dioxide emissions by 75% as EAFs can run on zero-carbon electricity:

“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,” Xijun Cao added.

However, the change could come at a cost as it would leave the UK without the ability to make industrial-grade “virgin steel”. Although EAF’s are more energy efficient, the end product is not the same grade of steel that is produced in blast furnaces, and is not suitable for all industrial uses in, for example, motor manufacturing and construction.

Charlotte Brumpton-Childs from the GMB union said the closure would be “a hammer blow” for UK steel and “devastating” for the people of Scunthorpe. Unions have expressed concern at the timescale of the migration and said they would examine British Steel’s proposals in detail.

Further reading

Settlement agreements and redundancy – Oakwood Solicitors

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