British Steel will close down the blast furnaces at its Scunthorpe plant in a move that unions say could cost up to 2,000 jobs.
The Chinese-owned company confirmed that it planned to replace them with two electric arc versions which can run on zero-carbon electricity, if it gets “appropriate support from the UK Government”.
It would build one new electric arc furnace in Scunthorpe and another at its Teesside plant.
These electric furnaces are much greener, but require a lot fewer workers to keep them going.
The move left unions worried about the jobs at the two sites, and they said that it will also leave the UK without the ability to produce its own steel.
Electric furnaces are used to recycle steel scrap into new steel.
Unions predict the move could ultimately lead to the loss of 1,500 to 2,000 jobs, predominantly at Scunthorpe.
British Steel employs around 4,500 people across the UK.
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.”
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— Xijun Cao, British Steel
“Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future.”
The company did not mention jobs in its announcement.
It said that the new furnaces could be operational by late 2025.
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.
On Monday, 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.”
Earlier this year, the company said it planned to close the coke ovens at its Scunthorpe plant, with the loss of up to 260 jobs.
The latest move is similar to proposals by rival Tata Steel earlier this year to switch the two coal-fired blast furnaces at its Port Talbot site to electric arc versions.
The changes are set to affect as many as 3,000 jobs.
