The UK’s steel industry is navigating a “highly complex global environment,” according to Business Secretary Peter Kyle, who cited disruptive trade tariffs and massive oversupply from China as key challenges. In response, Kyle is backing a strategic shift to electric arc furnaces (EAFs) at British Steel’s Scunthorpe plant.
This move is a central plank of an upcoming steel strategy, set to be published in December, which aims to secure a future for the state-controlled plant. Kyle stated the government is “keen to see that transition happen,” framing it as a necessary modernization to compete and to meet net-zero targets.
The global pressures are severe. Kyle noted that the government had been “forced to change plans” due to the industry-wide crises. This includes spending a significant portion of its £2.5bn steel fund simply to keep British Steel and the insolvent Liberty Steel running, highlighting the sector’s fragility.
Industry representatives reacted with cautious optimism. UK Steel, a lobby group, called the minister’s comments “encouraging” and a “clear future vision.” However, they reiterated that technological change must be paired with policy change, demanding “lower power prices and robust trade policies” to create a level playing field against international competitors.
While the EAF shift addresses the carbon and global competition issues, it creates domestic ones. Unions are wary, pointing to job losses at other plants that made the switch. Furthermore, it jeopardises the UK’s primary steelmaking capability, a strategic asset that the government had previously promised to protect.