British Steel ditches plans to build new furnace in Teesside

The Chinese-owned group had planned to build one ‘green steel’ furnace in Teesside — creating hundreds of jobs in the process — and another at its main works in Scunthorpe, Lincolnshire, which is currently being restructured.

However, both furnaces will now be built in Scunthorpe under plans being discussed with British government ministers.

British Steel has been in negotiations for several years to secure taxpayer funding to move from its high-emitting blast furnaces to EAFs under a £1.25 billion rescue of the business. As stated in the report, the company has struggled due to ramping energy costs, which has meant that its Scunthorpe works is losing about £1 million a day.

Teesside’s mayor, Ben Houchen, had pledged to return steelmaking to Teesside, whose local economy was deeply impacted by the closure of the Redcar steelworks in 2015, however, following the Labour party’s victory in the July 2024 election, a subsidy deal which included the construction of a new furnace in Teesside was shelved.

Houchen said that building both electric arc furnaces in Scunthorpe was a risk to national security as blast furnace production in Lincolnshire would need to halt while the new equipment was constructed.

The UK government said: “We’re working across government in partnership with trade unions and businesses, including British Steel, to secure a green steel transition that’s right for the workforce, represents a good investment for taxpayers and safeguards the future of the steel industry in Britain.”

Source: The Times