British Steel to shut blast furnaces at Scunthorpe plant with 2,000 jobs at risk

British Steel has announced the closure of the blast furnaces at its Scunthorpe facility, a move that may result in the loss of approximately 2,000 jobs, according to unions. The company, which is under Chinese ownership, has revealed plans to replace these traditional furnaces with two electric arc furnaces that can operate using zero-carbon electricity, if it gets "appropriate support from the UK Government." 

One of these electric arc furnaces will be built in Scunthorpe, while the other will be located at the Teesside plant. These electric furnaces are more environmentally friendly but require significantly fewer workers to operate. This move has raised concerns among unions regarding potential job losses at both sites and the impact on the UK's domestic steel production capabilities. 

Electric furnaces are primarily used for recycling steel scrap to create new steel. Unions anticipate that this shift could ultimately lead to the loss of between 1,500 and 2,000 jobs, primarily concentrated in Scunthorpe. British Steel currently employs approximately 4,500 people across the UK.

Community union general secretary Roy Rickhuss said: “Were they to be realised, the plans that British Steel has announced, combined with Tata Steel’s plans, would leave the UK unable to make steel from raw materials and dangerously exposed to international markets. Community firmly believes that the blast furnaces continue to be vital in any responsible transition to green steelmaking.”

Sharon Graham, general secretary of the Unite union, said: “There is absolutely no need for mass redundancies at British Steel. We do not accept the need for one single job cut. The strategy of successive governments has failed. Steel is vital to the UK’s economic success, yet steelworkers are being abandoned by this government.”

British Steel chief executive Xijun Cao 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. Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future.”

The company did not mention job losses in its announcement but said that “preliminary talks” have started with trade unions, and “promised to support employees affected by the decarbonisation plans”. An external specialist will review the plans on behalf of the trade unions. It said that the new furnaces could be operational by late 2025. The news comes after reports that British Steel is also closing on a Government-funded support package worth around £500 million to help fund the changes.

On Monday, a Government spokesman said: “Our commitment to the UK steel sector is clear, and we continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the sector and its workers. We have offered a generous support package including more than £300 million of investment for British Steel to cut emissions, help safeguard jobs and unlock over £1 billion in stakeholder investment. Ultimately, it is for British Steel to manage commercial decisions for the future of the company, and we cannot comment on ongoing commercial negotiations beyond that.”

Jonathan Reynolds MP, Labour’s shadow business secretary, said: “The Conservatives’ sticking plaster plans would leave the UK unable to produce any primary steel products right at the time when the entire world will be demanding these goods for the net zero transition. This is not a serious joined-up plan for the long term for our steel industry and it will make thousands of workers in Scunthorpe redundant.”

Earlier this year, the company said it planned to close the coke ovens at its Scunthorpe plant, with the loss of up to 260 jobs. The latest move is similar to proposals by rival Tata Steel earlier this year to switch the two coal-fired blast furnaces at its Port Talbot site to electric arc versions. The changes are set to affect as many as 3,000 jobs.

The road to decarbonise steelmaking will be vital for the UK’s climate change targets. The Port Talbot and Scunthorpe sites burn coal to make steel, and together account for around 15% of the UK’s entire industrial emissions. The Climate Change Committee has suggested that the Government “set targets for ore-based steelmaking to reach near-zero emissions by 2035.”