The future of UK steel now boils down to a fundamental technological choice: stick with iron ore, switch to scrap, or gamble on hydrogen. Business Secretary Peter Kyle has backed the scrap route, championing electric arc furnaces (EAFs), but the decision is far from simple.
The current method at Scunthorpe relies on blast furnaces, which make “primary steel” from iron ore. This process is strategically important, as it makes the UK self-reliant for new steel. However, it “vent[s] huge amounts of carbon dioxide” and is a key obstacle to the UK’s net-zero targets.
The second option, Kyle’s preferred EAFs, “use electricity to melt down scrap steel.” This is far cleaner and secures a future for the plant. The problem? It “raise[s] doubts about the fate of blast furnaces,” threatens thousands of jobs, and abandons the “primary steelmaking” pledge.
This leads to the third, “hybrid” option: a green hydrogen-based Direct Reduced Iron (DRI) plant. This facility would process iron ore into a form that EAFs can use, preserving primary steelmaking with “much lower carbon emissions.”
This high-tech solution seems perfect, but “industry sources have cast doubt on the financial viability.” With the government’s £2.5bn steel fund already depleted by bailouts, this hydrogen gamble may be too expensive, forcing a hard choice between capability and climate.
