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Tue May 21 2024

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Chinese seek UK subsidies before EAF construction will begin

4 Apr British Steel has been granted planning permission to build an electric arc furnace at its Teesside plant as part of its £1.25bn decarbonisation plan.

Artist's impression of British Steel's proposed Teesside electric arc furnace
Artist's impression of British Steel's proposed Teesside electric arc furnace

Redcar & Cleveland Borough Council has approved British Steel’s application following a detailed consultation period.

British Steel, owned by China’s  Jingye Group since 2020, also wants to build an electric arc furnace (EAF) at its Scunthorpe site. This application is set to be decided imminently by North Lincolnshire Council.

However, the Chinese are holding out for financial assistance from British taxpayers. It is lobbying the UK government for “appropriate support” for its investment in decarbonising steel production.

British Steel president and chief executive Xijun Cao said: “The proposed installation of EAFs in Scunthorpe and Teesside is central to our journey to a green future as they would help us reduce emissions of CO2 by more than 75%. However, it is crucial we now secure the backing of the UK government.

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“We started talks with the UK government in 2022 about the timely support we require on our journey to net zero, including the need for the British government to adopt the correct policies and frameworks now to back our drive to become a clean, green, and successful company. We are committed to working with the UK government and need to reach an agreement quickly so we can achieve our ambitious goals, secure thousands of jobs and keep making the steel Britain needs for generations to come.”

Preparation works, including environmental and technical studies, and equipment selection, are under way while discussions with the UK government continue.

Both proposed EAFs would replace the aging iron and steelmaking operations at British Steel’s Scunthorpe site which are responsible for the vast majority of its CO2 emissions. The company proposes maintaining current operations until a transition to electric arc steelmaking.

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