Chinese-owned British Steel is planning to close its blast furnaces in Scunthorpe. The move will likely put up to 2,000 jobs at risk.

The plan is to replace the blast furnaces with two electric arc furnaces (EAFs) – one at the company’s Scunthorpe facility, the other in Teesside.

According to Jingye, the Chinese company that owns British Steel, the transition is likely to take between two and three years.

The plan is to transform British Steel from a company reliant upon heavily polluting traditional steelmaking processes based around the blast furnace to the the greener, more sustainable method based around the use of electric arc furnaces.

In the USA, over 70% of steel is produced using electric arc furnaces, but world wide over 70% of steel is still manufacturered using blast furnaces.

According to the BBC report, ‘unions estimate the shift could ultimately lead to the loss of 1,500 to 2,000 jobs, predominantly at Scunthorpe’.

According to the Department for Business, British Steel’s plans will put the company on a more sustainable footing at a time when the steel industry globally is looking at a variety of technologies – based around the use of electric arc furnaces – to reduce the industry’s carbon emissions.

Currently, the global steel industry accounts for between 7% and 9% of all CO2 emissions. According to the BBC report, a support package, thought to be up to £500m, which mirrors a package agreed for UK-based Tata Steel, has been discussed and is close to finalisation.

Tata has already announced that it will close its two blast furnaces in Port Talbot, South Wales, and replace them with electric arc furnaces, which will likely result in up to 3,000 job losses.

The BBC report claims that Government sources believe blast furnace-based plants are not economic and are not ‘green’, making them unsustainable on financial and environmental grounds.

There are claims that closing down blast furnace steelmaking will mean that UK-based steelmakers will be unable to make so-called ‘virgin steel’, which is something the automotive industry relies upon. That said, the EAF-based ‘minimill’ facilities in the USA – which are scrap-based – are constantly increasing their levels of technical sophistication and it is believed that it won’t be long before an EAF can compete with traditional steelmaking processes in terms of the quality of the end product.

A British Steel spokesperson told the BBC that the company was committed to ‘providing long-term, skilled and well-paid careers for thousands of employees and many more in our supply chains”.

British Steel announced in February that it was closing its coking oven, used to turn coal into fuel for the blast furnaces. At the time chief executive Xifeng Han said steelmaking in the UK was ‘uncompetitive’ with some of the highest energy, carbon and labour costs in the world.