The government has made £600m available to help Britain’s two biggest steelmakers switch to greener technology and protect jobs, according to reports.
Chancellor Jeremy Hunt is understood to have offered £300m each to British Steel and Tata Steel. This support would be tied to the firms investing in their plants – located respectively at Scunthorpe in Lincolnshire and Port Talbot in South Wales.
Together, these facilities employ thousands of workers but also produce large amounts of carbon dioxide from traditional blast furnaces.
It was thought that an announcement confirming the support could be made as soon as this week, but according to The Guardian, the timing is dependent on the companies accepting the offers.
British Steel has recently been in talks with the government over a possible support package as it struggles with high energy costs. The company was bought out of administration in 2020 by Chinese firm Jingye.
It is thought that in return for £300m, British Steel would need to replace its two remaining blast furnaces at Scunthorpe with greener technology.
Tata Steel, which runs the UK’s largest steel plant at Port Talbot – where there are also two blast furnaces – is reportedly in line for a similar deal.
But sources close to the company told BBC News that this may not be enough to persuade it to make the necessary investment. Internal company estimates are understood to put the cost of switching to emissions-free steel at up to £3bn.
A spokesperson for the Department for Business, Energy & Industrial Strategy said: “The government recognises the vital role that steel plays within the UK economy, supporting local jobs and economic growth, and is committed to securing a sustainable and competitive future for the UK steel sector.
“The business secretary considers the success of the steel sector a priority and continues to work closely with industry to achieve this.”
British Steel and Tata Steel have been contacted for comment.
