British Steel is continuing its discussions with the UK government regarding the company’s decarbonization plans and the future operations of its UK business, a company spokesperson told S&P Global Commodity on Jan. 13.
While the company did not provide additional details, local media sources familiar with government discussions indicated that the initial plans, which envisioned building one electric arc furnace at Scunthorpe and another at Teesside, have been scrapped in favor of constructing the two furnaces at the Scunthorpe, north Lincolnshire site.
British Steel was nationalized in 2019 while the government sought buyers. It was subsequently sold to the Chinese steelmaker, The Jingye Group, which pledged a GBP1.25 billion ($1.55 billion) decarbonization plan. Under the proposed plan, the company was aiming to install two electric arc furnaces—one at its headquarters in Scunthorpe and the other at its manufacturing site in Teesside.
“While progress continues, no final decisions have been made,” the company spokesperson said.
“We’re working across government in partnership with trade unions and businesses, including British Steel, to secure a green steel transition that’s right for the workforce, represents a good investment for taxpayers, and safeguards the future of the steel industry in Britain,” a spokesperson from the Department for Business and Trade said to S&P Global when reached for a comment on Jan. 13, underscoring the government’s commitment to preventing the end of steelmaking in the UK, with up to GBP2.5 billion of investment for the UK steel industry.
Currently, British Steel operates two furnaces: the Queen Anne Blast Furnace and the Queen Bess Furnace. The Queen Anne Blast Furnace was temporarily offline due to operational issues but resumed operations in late December.
British Steel’s plant in Scunthorpe is the only steelmaker in the UK that still produces crude steel after Tata Steel closed all its blast furnaces at Port Talbot in South Wales, securing Eur500 million in funds for its low-carbon transition to build its Electric Arc Furnace.
The company has been working with the government for months to secure funding for the relaunch of the site and to begin the transition from blast furnace production to electric arc furnace production, with the first EAF expected to become operational by late 2025. This would replace the 3 million mt/year blast furnaces responsible for the vast majority of the company’s CO2 emissions.
Platts, part of S&P Global Commodity Insights, assessed Hot Rolled Coil weekly (HRC) DDP West Midlands at GBP520/mt on Jan 9.