This post is by Dr Colin Church, CEO at The Institute of Materials, Minerals and Mining. Note: this is a fast-evolving story. For the latest developments, see the BBC’s live coverage.
The crisis at Scunthorpe is just the latest episode in a decade of crises for the UK steel industry. The government must act fast to turn things around and establish a stable policy framework that will enable this industry to thrive in the 21st century.
After years of underinvestment and rising global competition, our steel sites have been left adrift. The closure of the blast furnaces at Port Talbot steelworks six months ago, combined with the last government’s lack of engagement and coherent planning with workers despite the threat to thousands of jobs, was an urgent wake-up call. But despite plenty of behind the scenes negotiations, steelworkers find themselves in similar circumstances once again.
Now, as Trump’s tariffs add pressure, the Scunthorpe site faces closure unless an urgent solution is found. With that, the UK would lose a major chunk of its steelmaking capacity and supplies to the rail, construction and shipbuilding industries, not to mention the rapidly growing clean energy sector. Although this may be the final straw for Scunthorpe’s Chinese owners, Jingye, it must not be the straw that breaks the back of Britain’s steel industry.
Supporting the markets of the future is the way to attract investment into the UK and turn around decades of economic neglect. The government’s upcoming steel strategy must be the turning point, laying out a clear long term plan to transition our outdated steel sector toward a cleaner, more resilient future.
Let’s be clear: sticking with blast furnaces and business as usual won’t make us any more secure. Increasing global tensions have merely exposed what has been a national security issue for years. The UK’s capacity to meet its own steel demand has shrunk and our steelmakers are dependent on volatile international markets for coking coal and iron ore.
Making better use of our scrap steel would offer far more security. The UK has a wealth of scrap steel at its disposal, readily available to replace the millions of tonnes of iron ore we currently import from overseas. In fact, Green Alliance research shows that around 80 per cent of the UK’s steel demand could be met with recycled steel.
Electric arc furnaces (EAFs) are a viable, green technology already being employed across the country and at scale in the US. Committing to EAFs, supported by investment, public ownership during the transition and a serious plan for workforce reskilling, would enable the UK to rebuild its steel-making capacity, secure its own steel supply and reduce exposure to global market shocks.
This week, the usual anti-net zero commentators have come out strongly against EAF dependence, peddling the false narrative that recycled steel is low quality and reliance on EAFs will be an economic setback.
That’s simply not true. EAFs can make any kind of steel through varying mixtures of scrap and iron.
Some of our most sophisticated steel products are already being made with steel from EAFs, from aeroplane landing gear to nuclear reactors and naval submarines. Better sorting of scrap steel, to remove contaminants like copper wires from old cars before melting them down, will help to increase quality and further reduce the need for virgin materials. And there’s huge potential in closed loop recycling. Across the channel, France is directly recycling old rail tracks to make high-grade steel for new railway lines. We could be doing the same.
This is a growth opportunity we’re rapidly losing out on. There’s a reason that the US has pivoted to recycling steel in EAFs and European nations are following suit, backed by some big investments in clean iron making. Global buyers are demanding cleaner steel.
Remediating the site of the Redcar steelworks after its closure and preparing it for new investment cost nearly £500 million, with around half of that coming from the government. Supporting workers added another £50 million in costs. If Scunthorpe were to face closure, the costs would likely be even greater.
Instead, the government should commit to a phased transition of the site from blast furnaces to EAFs, with a decision on whether to add clean ironmaking to come later. Coupled with strong support for the workforce, this would be much better value for money than allowing the plant to close, and it also offers long term security.
As I write this piece, I hear that Parliament is being recalled tomorrow, Saturday 12 April, to discuss “steel industry (special measures)” legislation. This gives me hope that the government will act in time to secure the sector’s future as a vital part of our economy and of its transition to net zero, and not miss this window of opportunity.
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