British Steel to shut down blast furnaces at Scunthorpe plant ‘leaving 2,000 jobs at risk’
British Steel has revealed a decarbonisation plan that could result in the loss of 2,000 jobs in Scunthorpe, according to unions.
The Chinese-owned company confirmed it wanted to shut down the blast furnaces at its manufacturing base there.
Replacing them would be two cheaper, greener electric arc furnaces (EAFs) – one in Scunthorpe and the other on Teesside, where it has two existing mills.
Teesside lost its main steelworks in 2015 when the Redcar plant was mothballed with the loss of 1,700 jobs.
Jingye Group said its plans were aimed at making UK-produced steel competitive again and creating a sustainable future for the business.
While it did not put a figure on the number of jobs to be lost ahead of talks with unions, the company has long argued that high energy and labour costs are a barrier to profitability.
It said that the proposed £1.25bn investment was subject to a government grant, understood to be worth £300m.
The company argued that its plans would reduce British Steel’s carbon dioxide emissions by 75% as EAFs can run on zero-carbon electricity.
Chief executive Xijun Cao said: “Decarbonisation is a major challenge for our business but we are committed to manufacturing the home-made, low-embedded carbon steel the UK needs.
“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 British Steel works in Scunthorpe
The new furnaces could be operational by late 2025, the company added.
The decision is set to leave the country without an industrial grade steel manufacturing capability.
That is because India’s Tata Steel plans to close down its two blast furnaces at the sprawling Port Talbot works in south Wales, risking up to 3,000 jobs, through its own decarbonisation and cost-cutting plan.
EAF–produced steel is more energy efficient and tends to be made from scrap.
Community Union general secretary Roy Rickhuss responded: “We are deeply concerned by British Steel’s plans for an EAF-only approach at Scunthorpe and Teesside, and it is vital a meaningful consultation takes place to assess all the options to secure the future of steelmaking.
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“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.”
Business
Energy bills to rise again from January but spring falls to come, research firm Cornwall Insight forecasts
Energy bills are to rise again next year, according to a respected forecaster.
Costs from January to March are projected to rise another 1% to £1,736 a year for the average user, according to research firm Cornwall Insight.
The energy price cap, which sets a limit on how much companies can charge per unit of electricity, is also expected to rise, costing typical households an extra £19 a year.
It’s a further increase after energy costs rose 10% from October.
After the latest hike, there were hopes of a fall in the new year, but volatile wholesale gas and electricity markets are still above historic average costs.
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Prices have gone up due to supply concerns arising from Russia‘s war in Ukraine, and maintenance of Norwegian gas infrastructure.
But spring is expected to herald a reduction as is October 2025, Cornwall Insight said.
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Every three months energy regulator Ofgem revises the cap based on wholesale costs.
The official January price cap announcement will be made on Friday.
It comes as millions of pensioners lost their automatic winter fuel allowance payment after the government means-tested the benefit.
Meanwhile, Cornwall Insight’s principal consultant Dr Craig Lowrey warned “millions” of households won’t heat their homes to “recommended temperatures, risking serious health consequences” with bills on the rise.
“With it being widely accepted that high prices are here to stay, we need to see action,” he said, suggesting options like cheaper rates for low-income homes, benefit restructuring, or other targeted support for the vulnerable “must be seriously considered”.
The energy price cap system is being reviewed by Ofgem with possible changes to the standing charge coming over the next year.
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The long-lasting solution to high energy bills is the transition to UK-produced renewable power, the firm said.
“While there will be upfront costs, this shift is essential to building a sustainable and secure energy system for the future.”
The owners of Scotland’s only oil refinery have rejected a US-led approach about a possible bid for it months before its scheduled closure.
Sky News has learnt that a consortium said to be led by Robert McKee, an American energy industry veteran, wrote to Petroineos, the owner of the Grangemouth site, to express an interest in buying it.
The approach, which is understood to have been made earlier this month, was rejected by Petroineos, which is 50%-owned by the petrochemicals empire founded by the Manchester United FC shareholder Sir Jim Ratcliffe.
The consortium is understood to comprise The Canal Group, which is reportedly developing a green energy refinery in Texas, and Trading Stack, a Middle East-based commodities trader.
Mr McKee spent nearly four decades with ConocoPhillips, one of the biggest energy companies in the US.
Sources close to the situation said that Petroineos had rebuffed the offer in order to concentrate on a publicly announced plan to transform the century-old plant into a finished fuels import terminal.
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They added that the nature of the consortium’s approach had raised questions about its access to financing and expertise in operating an asset of this kind.
The Grangemouth refinery, which employs about 450 people, loses about £200m annually.
Its other shareholder is the state-backed Chinese energy giant PetroChina.
The site is due to close next year.
A person close to the consortium insisted that its financing was robust and said it would assess the feasibility of building a new refinery elsewhere in the area.
They added that the consortium had had “positive interactions” with trade union officials, and believed that there was scope to rapidly make Grangemouth’s refinery operations profitable.
On Monday, a spokesman for Petroineos said: “Since the Petroineos joint venture was formed 13 years ago, our shareholders have invested nearly £1bn in the refinery, only to absorb losses of £600m.
“Last week, the refinery lost £385,000 on average each day and we expect to lose more than £150m in total during the course of this year.
“We have not received any credible or viable bids for the refinery.”
A spokesman for the consortium declined to comment.
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