British Steel is close to signing an agreement with the government on green transformation

Steelmakers Tata Steel and British Steel are continuing negotiations with the UK government to finance their green transformation, S&P Global reports.

According to British media reports, the government is close to signing a deal with British Steel. Recently, Secretary of State for Business and Trade Cami Badenoch visited the company’s Teesside plant and headquarters in Scunthorpe.

«We are confident our proposals, which are subject to appropriate support from the UK government including the adoption of the correct policies and frameworks, will help secure the low-embedded carbon steelmaking the UK requires,» a British Steel spokesperson told S&P Global.

According to him, the company is committed to working with the government and needs to reach an agreement quickly to realize the announced goals.

British Steel, owned by China’s Jingye, is reportedly seeking up to £600 million ($753 million) in government support to implement its £1.25 billion decarbonization plan. The company began negotiations with the British authorities over a year ago. The steelmaker has already received permission from local authorities to build electric arc furnaces.

British Steel has started preliminary talks with trade unions and promised to support employees affected by its decarbonization plans.

At the same time, Tata UK has already announced the timing of the closure of blast furnaces in Port Talbot. Trade unions are strongly opposed to this decision. Unite, the main trade union in the UK, has informed the company that it is likely to call an industrial action on May 30.

In 2023, UK steelmakers produced 5.62 million tons of steel. The steel industry is responsible for 14.2% of greenhouse gas emissions from the manufacturing industry and 2.4% of the country’s total greenhouse gas emissions.

As GMK Center reported earlier, British Steel announced a £1.25 billion decarbonization plan in November last year. It involves the replacement of blast furnaces with two electric arc furnaces to be built at the production sites in Scunthorpe and Teesside. The new furnaces could be commissioned by the end of 2025.