By GB News (World News) | Created at 2026-10-05 23:20:55 | Updated at 2026-10-06 00:00:35
59 minutes ago
Britain must build more electric furnaces and export less scrap if it wants to revive its steel industry, a report finds.
Research from the Energy and Climate Intelligence Unit (ECIU) found that the UK has "all of the ingredients" for a renaissance in steel. This includes a ready supply of scrap that could be recycled, rather than exported.
But it said the window to act on the "significant opportunity to rebuild domestic capability" is closing.
Traditionally, steel has been produced in blast furnaces. These convert ore into metal and are the main method of producing primary, or virgin, steel.
But manufacturers are increasingly turning to electric arc furnaces (EAF), which use powerful electricity to melt scrap metal into fresh steel.
Although they cannot produce virgin steel from iron ore, they are quicker to build and have lower emissions. Green, or low carbon steel, is increasingly in demand, the ECIU, a climate and energy policy group, said.
The country only has two remaining blast furnaces, both at British Steel's plant in Scunthorpe. The facility was nationalised in summer after Chinese owners, Jingye, threatened to switch them off.
The Government said the move was in the national interest and was needed to preserve domestic steelmaking.
Port Talbot, famed for steel production, closed its blast furnace in 2024
GETTY
A recent report by the Public Accounts Committee has said that the Government had not outlined a "credible plan" for the site, which is costing an estimated £1.3 million a day to run.
Port Talbot, famed for steel production, closed its blast furnace in 2024. It is currently building a £1.25billion EAF, which will be one of the world's largest.
The ECIU, working with CBI Economics, says more EAFs are needed to meet domestic demand. It says that sites such as Scunthorpe could become "centres of domestic recycling and modern steel production".
It estimates that domestic demand for steel will grow from 9.1 million tonnes today to 14 million tonnes by 2050, driven by housebuilding and energy infrastructure.
The ECIU forecasts that the UK would need two additional Port Talbot-sized EAFs "to close the gap and avoid becoming increasingly dependent on imported steel".
There is no shortage of scrap for the furnaces, its report, Scrap Gap, found. It estimates that the UK generates enough scrap steel to significantly expand domestic production.
But three quarters of this, around eight million tonnes, is exported because of a lack of recycling capacity. Some of this is turned into finished steel products abroad and then sold back to the UK.
Jess Ralston, Head of Energy at ECIU, said: "Britain has the ingredients needed for a steel revival. We have growing demand from housebuilding, offshore wind, electricity networks and the automotive sector.
"We generate millions of tonnes of scrap steel every year. With taxpayers now having a direct stake in major parts of the industry, there is an opportunity to build on these rescues with a long-term industrial strategy.
"The question is whether Britain captures that opportunity at home or continues exporting raw materials and importing higher-value steel products.
"Every shipment of scrap that leaves Britain represents jobs, investment and industrial value that could potentially be created at home."
She went on: “This is about reindustrialisation, taxpayer value and industrial sovereignty. Countries around the world are investing in modern steelmaking as they recognise its strategic importance.
"Communities such as Scunthorpe could become centres of domestic recycling and modern steel production. But time is running out for this town, and others."
