The single biggest sticking point in the government’s new plan for Scunthorpe is the “primary steelmaking” capability. Business Secretary Peter Kyle’s backing for electric arc furnaces (EAFs) directly threatens this, creating a major conflict with unions and his own party’s previous pledges.
The government’s justification for taking control of British Steel in April was, according to Kyle’s predecessor, to “preserve ‘primary steelmaking’.” This process, which uses blast furnaces to make virgin steel from iron ore, is seen as a key strategic asset.
However, Kyle is now “keen” on a transition to EAFs, which are cleaner but melt scrap steel. This move, central to a new December steel strategy, would end the UK’s primary steelmaking ability.
The Community union has made this a red-line issue. Assistant General Secretary Alasdair McDiarmid stated that while a “just transition” is welcome, it is essential to “maintain primary steelmaking capacity here in the UK.”
This has forced the government to consider a costly and complex compromise: a separate facility to produce Direct Reduced Iron (DRI) using green hydrogen. This DRI could feed the EAFs, saving the capability. But “industry sources have cast doubt on the financial viability” of this, leaving the government’s plan with a massive, unresolved problem.