The Scunthorpe plant of British Steel will close its blast furnace, potentially leading to the elimination of 2,000 positions, according to labor unions.Thank you for reading this post, don't forget to subscribe!
If it receives “adequate support from the UK government,” the Chinese-owned firm stated that it intends to replace them with two electric arc variants that can operate on zero-carbon electricity.
A new electric arc furnace will be constructed in Scunthorpe, with another one at the Teesside facility.
Although these electric furnaces are more environmentally friendly, they require significantly fewer workers to sustain operations.
Trade unions expressed concerns regarding employment at both locations and also claimed that this action would deprive Britain of its ability to manufacture steel domestically.
Electric furnaces are employed to recycle scrap steel into new steel.
Trade unions estimate that this decision could ultimately result in the loss of 1,500 to 2,000 positions, mostly in Scunthorpe.
British Steel has approximately 4,500 employees across the UK.
Roy Rickhus, the general secretary of the community union, remarked: “Should British Steel’s announced plans materialize, along with Tata Steel’s plans, the UK will be rendered incapable of producing steel from raw materials and will be dangerously exposed in global markets.
“The community union strongly believes that blast furnaces are crucial in any responsible transition towards green steelmaking.”
British Steel’s chief executive, Zijun Cao, stated: “We have engaged extensively with both the public and private sectors to explore the feasibility of achieving net-zero steel production through our current blast furnace operations.
“However, thorough analysis demonstrates that this is not achievable.
“The detailed study indicates that electrification can expedite our journey to net-zero and shift British steel towards a sustainable future.”
In its announcement, the company did not mention any job losses but noted that “preliminary discussions” with trade unions had commenced and pledged to support affected employees concerning decarbonization plans.
An external expert will evaluate the plans on behalf of the trade unions.
The company anticipates that the new furnaces could commence operations by the conclusion of 2025.
Reports have surfaced indicating that British Steel has decided to forgo a government-funded assistance package valued at approximately £500 million to finance these changes.
A government spokesperson stated on Monday: “Our commitment to the UK steel sector is evident, and we will continue to collaborate closely with the industry, including British Steel, in order to secure a sustainable and competitive future for the sector and its workers.
“We have provided a generous support package, which includes an investment of over £300 million for British Steel to facilitate emissions reductions, safeguard jobs, and unlock over £1 billion in stakeholder investment.
“Ultimately, it is British Steel’s responsibility to make commercial decisions for the future of the company, and we cannot provide commentary on ongoing commercial negotiations beyond this point.”
Earlier this year, the company expressed its intention to close the coke ovens at its Scunthorpe plant, resulting in the loss of 260 positions.
These recent actions resemble the proposals made by rival company Tata Steel earlier this year to convert two coal-fired blast furnaces at its Port Talbot site into electric arc versions.
Approximately 3,000 jobs will be affected by these changes.
The transition to decarbonize steelmaking will be critical for the UK to achieve its climate change targets. The Port Talbot and Scunthorpe sites employ coal burning to produce steel, accounting for approximately 15% of the UK’s total industrial emissions.
The Climate Change Committee has recommended that the government “establish a target to achieve near-zero emissions for ore-based steelmaking by 2035.”