British Steel has faced significant challenges over the past year, highlighted by the forced shutdown of one of its two blast furnaces at the Scunthorpe plant, as reported by Financial Times. The shutdown occurred after the company mistakenly imported a low-quality and improperly conditioned coke, following the closure of its coke ovens in 2023. This error caused the "Queen Anne" furnace to become inactive. Initially, government officials feared that British Steel might be intentionally sabotaging its operations to justify closing its loss-making UK plants. However, investigations later revealed that the shutdown was due to a management error driven by cost-cutting and the complexities of maintaining such large-scale operations, rather than any malicious intent. BP's belief in "incompetence" rather than sabotage was confirmed by people familiar with the situation, who noted that the engineers involved misunderstood the intricacies of the furnace's requirements.

Alongside this incident, British Steel has made significant changes to its plans for the future of its operations in the UK. Originally, the company, owned by China’s Jingye Group, had proposed building one electric arc furnace at the Scunthorpe site and another at Teesside as part of a restructuring effort to transition to greener steel production methods. However, the company has now decided to focus solely on Scunthorpe, abandoning plans for Teesside. This shift has disappointed local leaders such as Lord Ben Houchen, the Conservative mayor of Tees Valley, who expressed his frustration over the Labour government’s alleged involvement in the decision. Houchen claimed that there had been “collusion” between the Labour government and unions to focus all new electric arc furnace construction at Scunthorpe rather than Teesside. Despite these claims, allies of Jonathan Reynolds, the business secretary, clarified that the decision was ultimately a commercial matter for British Steel. However, they acknowledged that Teesside remains an attractive location for investment.

British Steel’s decision to concentrate its efforts on Scunthorpe also highlights the company’s ongoing discussions with the UK government regarding the future of the steel industry in Britain. British Steel is seeking more than the £500 million allocated to Tata Steel for its Port Talbot plant to build an electric arc furnace. The government has committed £3 billion to the steel industry over the next decade, including support for both British Steel and Tata Steel. Jingye also injected £100 million into British Steel in October 2023 to help with the transition.

Unions have raised concerns over the shift to electric arc furnaces, which are less carbon-intensive but require fewer workers. The Community union, which represents steelworkers, has emphasized the importance of retaining both blast furnaces at Scunthorpe to ensure a smooth transition to green technologies. Union representative Alasdair McDiarmid stressed that it is critical to keep the blast furnaces operational to support the new technology.

Despite the setbacks, British Steel confirmed that both of its furnaces are now operational, and it continues to purchase raw materials to support steel production. The company remains in ongoing discussions with the government about its decarbonization strategy and the long-term future of its UK operations. However, no final decisions have yet been made.