British Steel Unveils Ambitious Decarbonisation Plan
British Steel has unveiled an ambitious plan, marking the most significant transformation in its history—a £1.25 billion proposal aimed at transitioning into a clean, eco-friendly, and sustainable enterprise by embracing electric arc furnace steelmaking.
Through a meticulous evaluation of its current operations, available technologies, and the demanding market landscape, the company is determined to expedite its decarbonisation efforts.
The proposed initiative, contingent upon appropriate backing from the UK Government, envisions the installation of two electric arc furnaces (EAFs). The first EAF will be situated at the company's headquarters in Scunthorpe, with the second to be positioned at its manufacturing site in Teesside.
These state-of-the-art furnaces are anticipated to become operational by late 2025, ultimately replacing the ageing iron and steelmaking facilities in Scunthorpe, which currently contribute significantly to the company's CO2 emissions. British Steel intends to continue its present operations until a seamless transition to electric arc steel production is achieved.
British Steel has initiated preliminary discussions with trade unions regarding electrification and has made assurances to support employees impacted by these decarbonisation plans. In a display of transparency, the company has consented to have its proposals assessed by an external specialist appointed by the trade unions.
Furthermore, British Steel is collaborating with North Lincolnshire Council on a comprehensive master plan geared towards attracting new businesses and employment opportunities to the Scunthorpe site, certain parts of which may become vacant if the proposals come to fruition.
Xijun Cao, CEO and President of British Steel expressed, "Decarbonisation poses a significant challenge for our business, but our commitment remains steadfast in producing locally sourced, low-carbon steel essential for the UK. We've engaged extensively with both the public and private sectors to explore the feasibility of achieving net-zero steel with our current blast furnace operations.
"Nevertheless, in-depth analysis has shown that this approach is not viable. Extensive studies indicate that electrification can expedite our journey to net-zero and pave the way for a sustainable future for British Steel, ensuring that we continue to meet our customers' steel demands."
Xijun further emphasised the dedication of British Steel's owners, Jingye, who have invested £330 million in the company over just three years and are fully committed to the unprecedented investment required to realise these proposals.
In October 2021, British Steel introduced its Low-Carbon Roadmap, pledging to invest in various technologies aimed at achieving net-zero steel production by 2050 while significantly reducing its CO2 intensity by 2030 and 2035. However, the company is now set on expediting its decarbonisation journey with the potential new operational structure expected to reduce CO2 intensity by approximately 75%.
Xijun added, "Our earnest desire to substantially reduce our carbon footprint, coupled with current market conditions, leaves us with no choice but to initiate a rapid business transformation. While decarbonisation is a process that won't happen overnight, we must take prompt and decisive action to secure a sustainable future for British Steel.
"We explored the possibility of a single large electric arc furnace in Scunthorpe, capable of meeting the steel demands of our rolling mills in the Humber and the North East. However, the need for a new National Grid connection, not expected until 2034, renders this option less viable. Therefore, we believe that having two smaller furnaces that can combine to produce the necessary steel volumes is the most practical and timely approach."
British Steel has conducted feasibility studies for the introduction of EAFs in Scunthorpe and Teesside. Discussions have been held with local authorities, including North Lincolnshire Council, Redcar and Cleveland Borough Council, and the Tees Valley Combined Authority.
Given the urgency to decarbonise its operations and the required planning procedures, the company anticipates submitting Environmental Impact Assessments to the relevant authorities soon. This proactive approach enables British Steel to meet necessary timeframes should it decide to proceed with the proposals and obtain the essential planning approvals.
Xijun concluded, "It is prudent to evaluate different operational scenarios to help us achieve our goals, and we remain committed to exploring our options. However, we firmly believe that electrification offers a rapid and sustainable solution to our decarbonisation challenge while also fostering the growth of sustainable employment.
"We are confident that our proposals will secure the low-embedded carbon steelmaking that the UK presently needs and will require for generations to come. Nonetheless, we call upon the UK to adopt the appropriate policies and frameworks now to support our decarbonisation drive.
"Countries with which our major competitors operate have already embraced such policies, and the longer we wait for their implementation in the UK, the more significant the impact and challenges it poses to our competitiveness and the nation's ability to meet its carbon objectives. We continue to engage in discussions with the government and, with its backing, are unwavering in our commitment to supplying the steel that Britain requires for years to come."
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Source: British Steel