British Steel proposes closure of Scunthorpe coke ovens to cut costs and emissions

British integrated steelmaker British Steel said Feb. 22 it was proposing to shut down its coke ovens to cut costs and carbon emissions, which could cut up to 260 jobs at its long products and rails facility.

Additional measures to "streamline" and cut costs could also be taken, he said.

The coke ovens at the company's Scunthorpe plant are nearing the end of their lives. The Chinese steelmaker plans to continue integrated steel production by increasing the use of scrap steel and adding ore-based metals to its blast furnaces to displace iron ore, the statement said.

The proposal is part of a "striving to overcome global economic challenges and build a clean and sustainable future," British Steel said in a statement. “Decisive action is needed due to unprecedented increases in operating costs, skyrocketing inflation and the need to improve environmental performance.”

British Steel said its energy and carbon bills increased by £190m ($230m) last year, including an additional £120m for energy and more than £70m for annual carbon costs.

British Steel, the UK's second largest steel producer, has a total steel production capacity of around 3 million tons per annum. Production capacity will not be affected if the coke ovens are closed, a company spokesman said Feb. 22.

A date for the proposed closure of the coke ovens, already discussed with unions, has yet to be confirmed. These proposals could result in the loss of up to 260 jobs at the company's Scunthorpe site. In total, more than 4,500 people work at different British Steel sites, of which about 300 are located in the Netherlands.

“Steel is vital to today's economy and as demand is expected to grow over the coming decades, British Steel has a critical role to play in securing the UK's own supply of high quality steel,” said Xifeng Han, CEO of British Steel.

British Steel owner Jingye Steel Group has invested £330m in the company's capital projects, including modernization and decarbonisation initiatives, since it acquired the business in March 2020, bringing it out of liquidation. At the time, the Chinese steelmaker pledged to invest some £1.2bn to modernize and improve British Steel, including by building an electric arc furnace at Teesside in the north of the UK.

“Jingye is committed to our long-term future, but decarbonization is a major challenge for our business and, like most companies, we are facing major challenges due to the economic downturn, rising inflation and exceptionally high energy prices,” British Steel said. says in the statement. “We have taken steps to reduce costs under our control; however, UK steel production remains uncompetitive compared to other international steel producers. Our energy costs, carbon emissions and labor costs are among the highest in the world, and these are factors that we cannot directly influence.”

Last summer, British Steel began talks with the UK government to discuss possible support amid rising costs and the need for decarburization. The company told S&P Global Commodity Insights in January that government support is "essential" for a successful decarbonization of British Steel. The steel mill said on February 22 that it was "extremely grateful" for the government's support, but did not provide details.

“It is important that we have the right policies and framework in place to support our ambition to be a clean, green and successful company, and we continue to discuss this with the government. We are committed to working together and [producing] the domestic steel that Britain needs for generations to come,” the steel company said in a statement.

The steel industry is one of the biggest carbon emitters in the UK and accounts for about 9% of the world's carbon emissions.

The steel mill noted that the closure of the Scunthorpe coke ovens would benefit the environment, including reducing air and water emissions. British Steel launched its Low Carbon Roadmap in October 2021 and is already implementing several projects to improve its environmental performance.

Ore based metals

“Introducing new technologies and working methods will help us reduce emissions and support net growth,” Xifeng Han said. “We have increased the amount of scrap used in the integrated steelmaking route. In addition, we started a project