Facing a “slew of crises,” from global tariffs to Chinese oversupply, the UK government is promoting a radical new plan for its steel industry. Business Secretary Peter Kyle said these pressures “forced” a change in plans, now culminating in a push for electric arc furnaces (EAFs) at Scunthorpe.
This new strategy, to be unveiled in December, is a direct response to this “highly complex global environment.” The government’s £2.5bn steel fund has already been depleted by “hundreds of millions” just to keep British Steel and Liberty Steel afloat in this hostile market.
The EAF plan is the proposed long-term solution. By transitioning to cleaner, scrap-melting technology, the government hopes to make the state-controlled plant more sustainable and competitive.
However, this solution to the external crisis creates an internal one. The EAFs threaten the jobs of “thousands of people” and would end the UK’s “primary steelmaking” capability.
Unions and industry are now making their own demands. Unions want a “just transition” and the retention of primary steelmaking. Industry group UK Steel is demanding “lower power prices and robust trade policies” to fight the very global crises the minister mentioned. The new plan must somehow address all these conflicting issues.
