Steelmaking is making a return to Teesside with a new electric arc furnace.

British Steel confirmed plans to build new furnaces at its Teesside and Scunthorpe plants. Electric furnaces are greener, recycling scrap steel into new steel, but require fewer workers to keep them going than a traditional blast furnace.

It comes after reports that British Steel is also closing on a Government-funded support package worth around £500 million to help fund the changes.

Where will it be?

The electric arc furnace will be located at Teesworks, Europe’s biggest brownfield regeneration project which includes the former site of Redcar steelworks. Since the closure of the steelworks in 2015 a plan to redevelop Teesworks as a location for new green industries has been progressed.

The furnace will be located on at Lackenby, next to British Steel’s existing Teesside Beam Mill. Teesworks is also part of the Teesside Freeport, which provides investment incentives for businesses.

Who is doing it?

British Steel is the company behind the plans. The company is owned by Chinese steelmaker Jingye. It already operates Teesside Beam Mill at Lackenby and Special Profiles Mill in Skinningrove, which process manufactured steel for industrial uses such as rail and construction.

What is an electric arc furnace?

Electric arc furnaces use green technology to melt scrap and produce new steel. The furnace generates heat from an electric arc between electrodes, as opposed to a blast furnace which used coke to supply the large amount of energy needed to heat metal.

The technology is already widely used in the US steel industry. It is seen as a way helping to decarbonise steelmaking, which is a traditional heavy user of energy and producer of CO2.

What does this mean for Teesside?

The announcement will see an emotional return of steelmaking to Teesside after the devastating closure of Redcar steelworks in 2015. The shutdown of the SSI UK plant led to the loss of thousands of jobs and the end of 170 years of steelmaking.

Teesside’s steel industry is world-renowned, producing steel for global icons such as the Sydney Harbour Bridge to the New World Trade Center in New York. The new furnace will provide jobs for a next generation of workers and also support British Steel’s existing Teesside operation.

When will it happen?

An application for planning permission will be submitted within weeks with work expected to start on site in mid-2024. The furnace is expected to be operational in 2025.

How many jobs will be created and lost in the plans?

The new furnace at Teesside will create hundreds of direct jobs. Thousands more are expected to be created in construction and the supply chain.

However, the plans involve closing the blast furnaces at the Scunthorpe plant in a move that unions say could cost up to 2,000 jobs. They also state it will leave the UK without the ability to produce its own steel.

Community union general secretary Roy Rickhuss said: “Were they to be realised, the plans that British Steel has announced, combined with Tata Steel’s plans, would leave the UK unable to make steel from raw materials and dangerously exposed to international markets. Community firmly believes that the blast furnaces continue to be vital in any responsible transition to green steelmaking.”

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What has British Steel said?

The company did not mention jobs in its announcement. British Steel chief executive Xijun Cao said: “We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations.

“However, thorough analysis shows this is not viable. Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future.”

What has the Government said?

A Government spokesman said: “Our commitment to the UK steel sector is clear, and we continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the sector and its workers. We have offered a generous support package including more than £300 million of investment for British Steel to cut emissions, help safeguard jobs and unlock over £1 billion in stakeholder investment.

“Ultimately, it is for British Steel to manage commercial decisions for the future of the company, and we cannot comment on ongoing commercial negotiations beyond that.”