The government’s control of British Steel, which began as an emergency rescue in April, is now evolving into a risky and transformative green transition. Business Secretary Peter Kyle has backed a plan to move the Scunthorpe plant from blast furnaces to electric arc furnaces (EAFs).
The initial intervention was to prevent the plant’s Chinese owner, Jingye Steel, from closing the site and eliminating 2,700 jobs. Now, the government is no longer just keeping the lights on; it is actively planning a new, long-term future for the site as part of a December steel strategy.
This transition to “cleaner electric arc technology” is intended to secure the plant’s viability and meet net-zero targets. However, it raises a new set of fears for the same workforce the government set out to save. EAFs require fewer workers, and thousands of blast furnace jobs are now in jeopardy.
Furthermore, the new plan conflicts with the government’s original stated mission. The April rescue was meant to “preserve ‘primary steelmaking’,” a capability that the EAFs will abolish. This has forced the government to explore a costly and “financially dubious” hydrogen-based compromise.
This entire risky manoeuvre is being funded by a £2.5bn pot that has already been significantly drained by the operational costs of the emergency rescue. The government’s role has shifted from saviour to social and industrial engineer, with no guarantee of success.