Despite the Business Secretary’s strong backing for a move to electric arc furnaces (EAFs), the future of the British Steel plant in Scunthorpe remains deeply uncertain. Peter Kyle’s endorsement of the green technology is just one piece of a complex puzzle involving foreign ownership, financial constraints, and massive job implications.
A critical, unresolved hurdle is the plant’s ownership. The government took emergency control in April to prevent its Chinese owner, Jingye Steel, from closing the site. However, Jingye remains the legal owner. A deal must be struck for them to “walk away” before any new, long-term strategy, including the installation of EAFs, can be implemented.
Financial questions also loom large. The government’s £2.5bn steel fund has been significantly depleted. Kyle confirmed “hundreds of millions” have already been spent on keeping British Steel and Liberty Steel afloat, leaving less available for the huge capital investment EAFs require.
Furthermore, the minister’s “clear future vision” is met with anxiety by the workforce. The switch from blast furnaces to EAFs threatens thousands of jobs. Steelworkers, recalling the 2,500 redundancies at Tata Steel in Port Talbot after a similar transition, are demanding a “just transition” that protects their livelihoods.
The new technology also challenges the UK’s industrial identity. Moving to EAFs, which melt scrap, would likely mean abandoning the “primary steelmaking” capacity of blast furnaces. This directly contradicts earlier government pledges and raises concerns from unions about preserving this strategic capability. More details are expected in the government’s December steel strategy.