A major contradiction has emerged in the government’s policy for British Steel, as its new net-zero plan collides directly with its 2024 pledge to save “primary steelmaking.” Business Secretary Peter Kyle is now backing electric arc furnaces (EAFs), a move that would achieve climate goals by sacrificing the very capability he was meant to protect.
The Scunthorpe plant was taken into state control specifically to preserve the UK’s ability to make virgin steel from iron ore, a process reliant on the plant’s blast furnaces. Kyle’s predecessor, Jonathan Reynolds, had “repeatedly said” this was the goal.
Now, Kyle is “keen to see that transition happen” to EAFs. These new furnaces are cleaner, using electricity to melt scrap, but they would make the blast furnaces—and the primary steelmaking process—obsolete.
This policy U-turn has alarmed unions. While they support a “just transition” to green technology, they are adamant that primary steelmaking capacity must be maintained. The government is now forced to find a way to do both.
The proposed solution is a green hydrogen-powered Direct Reduced Iron (DRI) plant, which would create a product that EAFs can use to make virgin steel. However, this is a costly and complex add-on, and “industry sources have cast doubt on its financial viability,” especially as the government’s £2.5bn steel fund is already shrinking.