Ideas & Observations
Guest contributor: Chris McDonald, strategy consultant
January 7, 2024
Steeled for a historic renaissance
Words by Chris McDonald
Strategy consultant and former chief executive at the Materials Processing Institute
With steelmaking set to be revived on Teesside following a near decade-long hiatus, Chris McDonald, former chief executive of the Materials Processing Institute, looks at British Steel’s £1.25 billion renaissance plans and why the blueprint – which promises greatly reduced carbon emissions – must be the catalyst for wider industry change.
Industrial-scale steelmaking is to return to Teesside following British Steel’s announcement that it is to build an electric arc furnace, melting scrap metal to produce ‘green’ steel.
Based at Lackenby, near Redcar, it will supply British Steel’s adjacent Teesside Beam Mill and a special profiles mill at Skinningrove, east Cleveland, for use in construction, infrastructure and specialist equipment.
Due to open in 2025, it is expected to create around 250 jobs and protect hundreds of other steel and supply chain posts in the region – as well as providing opportunities for a new generation of steelworkers.
However, as part of its multi-million-pound investment, the Chinese-owned company is replacing its traditional coke-fired steel plant in Scunthorpe with a second electric arc furnace, which will see the loss of 2000 jobs.
While it may be welcome news on Teesside, many will readily recall the devastation when our own Redcar steelworks closed in 2015.
And I fervently hope concerted efforts will be made to transfer those skills now under threat in Scunthorpe into emerging green technologies.
Electric arc furnaces are far less labour- intensive than traditional blast furnaces, and account for 30 per cent of the world’s steelmaking capacity, offering huge environmental benefits.
Blast furnaces, like that currently in use in Scunthorpe, account for ten per cent of the UK’s harmful carbon dioxide emissions, and it is estimated the average carbon footprint of steel is 1.85 tonnes of CO2 for every tonne of steel produced.
While electric arc furnaces play an important and growing role in the global decarbonisation of the steel industry, they cannot provide the full range and amount of steel needed by modern industrial economies, such as that required by the automotive and defence sectors.
Therefore, it is vital that both the Government and the steel industry continue to invest in primary steel production, steel made with iron ore, by investing in net-zero, hydrogen-powered furnaces.
Teesside’s planned electric arc furnace signals the rebirth of industrial steelmaking in the region, although the Materials Processing Institute – based on the outskirts of Middlesbrough – has kept that flame alive with its own pilot plant, used for the research and development of new steels and small-scale commercial production.
The British Steel version is likely to be 20 times the size of the institute’s electric arc furnace, but I’m confident it can play a supportive role in its development. British Steel’s plan marks a major step forward in securing the future of a sustainable UK steel industry, but more investment is urgently needed if this country is to achieve true sovereign capability.