The government is facing a difficult trade-off in its plan for British Steel: embrace a green future with electric arc furnaces (EAFs) or protect the UK’s strategic ability to make “primary steel.” Business Secretary Peter Kyle has indicated he is leaning towards the former, backing a shift to EAFs at the Scunthorpe plant.
This decision is central to a new steel strategy being drafted for December. Kyle stated he is “keen to see that transition happen,” as EAFs are far cleaner than the site’s current, carbon-belching blast furnaces. This would secure the plant’s future—which was in doubt under its Chinese owner, Jingye Steel—and help meet UK climate targets.
The problem is that EAFs melt scrap steel, not iron ore. This means the UK would lose its “primary steelmaking” capability, a move that contradicts the government’s own previous pledges. When ministers took control of the plant in April, they explicitly did so to save this capacity.
Unions are deeply concerned by this pivot. They are demanding a “just transition” that not only protects the thousands of jobs at risk but also “maintain[s] primary steelmaking capacity.” The memory of 2,500 job cuts at Tata Steel’s Port Talbot plant during a similar switch fuels their caution.
A potential, but costly, solution is being floated: building a separate Direct Reduced Iron (DRI) plant. This would use clean hydrogen to process iron ore into a form that EAFs can use. However, industry sources question the financial viability of this, especially as the government’s steel fund is already being rapidly depleted.