Chinese-owned British Steel has reportedly submitted a request for a package of taxpayer support worth £600m as it hopes to replace its emission heavy production with electric arc furnaces.

According to a report from The Guardian, government officials are due to review plans that set out the costs of switching from blast furnaces to electric arc furnaces at the company’s steelworks in Scunthorpe, Lincolnshire.

British Steel has struggled financially since being rescued from collapse in March 2020 by China’s Jingye. Auditors for the company in January warned the business, which employs 4,500 workers, faced ‘material uncertainty’ over its future.

British Steel in November announced plans to close its two blast furnaces at Scunthoarpe and replace them with much cleaner electric arc furnaces at Scunthorpe and Redcar, in North Yorkshire. The plans could eventually mean 2,000 job losses, as electric arc furnaces require far fewer workers.

“We need the next government to recognise the vital importance of the steel industry to our economy and national security, and to show ambition for the future of the sector.”

Alasdair McDiarmid, assistant general secretary, Community

Alasdair McDiarmid, the assistant general secretary of Community, a steelworkers’ union, said political party Labour’s pledge to invest £3bn in decarbonizing the steel industry could be a ‘gamechanger’ for the industry, as the UK general election fast approaches.

“We need the next government to recognise the vital importance of the steel industry to our economy and national security, and to show ambition for the future of the sector,” he said. “That’s something which has been dismally lacking over recent years, as epitomised by the bargain basement plan Rishi Sunak signed off with Tata – a proposal which would remove Britain’s primary steelmaking capacity and leave the country reliant on dirty steel imports from overseas.”

Source: The Guardian