The Teesside Furnace may be Jingye’s best avenue for receiving bailout funds

As the Government negotiates to help industry go green by converting the existing blast furnace at Scunthorpe, it was reported over the weekend that the company – now owned by Chinese giant Jingye – could instead build two new electric arc furnaces – one in Teesside and one in Scunthorpe – to qualify for hundreds of millions in state aid.

Tees Valley Mayor Ben Houchen said: “Although I cannot name a specific investor that I may speak to to ensure steel production returns Teesside is complicated and difficult to achieve but I have promised to bring steel production back to Teesside and I am keeping my promises.”

Ben Houchen at British Steel (Image: press release)

A spokesman for British Steel said: “While decarbonisation is a major challenge for our business, we are committed to transforming British Steel into a green and sustainable business, providing thousands of employees and many others with long-term, skilled and well-paid careers. “ our supply chains.

“As we move towards net zero, it is prudent to evaluate different operational scenarios to help us achieve our ambitious goals.”

Electric Arc Furnace (EAF) is a method of steelmaking that uses electricity to melt scrap metal. The use of oxygen lances to inject oxygen directly into the raw material and the melt reduces the cost of electrical energy.

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Chris McDonald, CEO of the Materials Processing Institute in Middlesbrough, which has its own much smaller electric arc furnace, said: “The proposal that British Steel would install an electric arc furnace on Teesside is not just about the environmental credentials, it’s about the Improve productivity.”

“I first made this suggestion in 2007 to avoid the high cost of transporting steel slabs from Scunthorpe to the Teesside Beam Mill. If this proposal goes ahead, it would be good news for the environment and good news for the Teesside Beam Mill.

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“However, we must remember that this is not good news for the many workers in Scunthorpe, where jobs will be lost as a result of this transition. That is why I also call for investment in a ‘just transition’, where new green industries and reskilling are targeted at areas where jobs are at risk.

“It’s critical to these communities and to the success of new green industries like automotive batteries and offshore wind.”

The Materials Processing Institute is a not-for-profit UK research and innovation center focused on supporting the steel and metals sector and the broader basic industries by developing advanced materials, achieving industrial decarbonisation, deploying digital technologies and reducing waste.

• Chris McDonald will be one of the in-depth interviews in the next BUSINESSiQ magazine. To register, click HERE