The government’s plan for British Steel forces a choice between a “carbon-heavy” past and a precarious new future. Business Secretary Peter Kyle has backed a switch to electric arc furnaces (EAFs) to ditch the polluting blast furnaces, but this new path is fraught with financial and social risks.
The “past” is the current setup: blast furnaces that “vent huge amounts of carbon dioxide” but support thousands of jobs and the UK’s “primary steelmaking” ability. This model is environmentally unsustainable and was threatened with closure by its Chinese owner.
The “future” Kyle is backing involves EAFs—a “cleaner” technology that melts scrap steel. This secures the plant’s future and aligns with net-zero. However, this future is “precarious” for the workforce, who fear a repeat of the 2,500 job losses at Port Talbot.
This future is also financially precarious. The government’s £2.5bn steel fund has been “drawn down” by “hundreds of millions” in bailouts, leaving “less money for capital investment” in the new EAFs.
To save the “primary steelmaking” capability, an expensive and “financially dubious” hydrogen (DRI) plant is also being considered. The government’s new steel strategy in December must prove it can navigate from its polluting past to a stable future without bankrupting the industry or its workforce.
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