Something that the system in general seems to not know:
A British Steel spokesman said: “Jingye has invested hundreds of millions of pounds to support the ongoing transformation of the business and is committed to investing in the long-term future of British Steel as we transition to net zero. The steel we make can play a central role in transitioning to a low-carbon, circular economy and we’ve ambitious plans to invest in a range of technologies to reduce the carbon intensity of our operations, with solutions that are globally recognised and accepted.”
OK, super. Net Zero means one of two things about steel. If the solution is to go circular then that means recycling scrap steel. That can be done, it means using electric arc furnaces and it’s a just fine way to make steel. Britain exports scrap steel so there’s a domestic supply of the raw material. There is a problem in that it’s still not possible to make certain steels via this technological route - anything for the nuclear industry for example. That’s just an industry where we must always create from virgin, not recycled, material.
If we’re not to go circular, but still Net Zero, then we have to change the technology used to make that virgin steel (“virgin” here means from iron ore) to some form of direct reduction, or DRI. That’s OK, that can be done. This allows the production of all kinds of steel (in those words from the movie, “both country and western”) but at greater capital and possibly operating costs.
The problem with these simple facts is that it’s not obvious that the system - politics, government, the bureaucracy and so on - quite grasps the next part of this:
The Chinese owners of British Steel have injected only a fraction of the £1.2bn they promised to invest despite begging British taxpayers for a bailout worth hundreds of millions of pounds.
Jingye, the largely unknown Chinese company that acquired British Steel almost three years ago, has pumped in just £156m since acquiring the business in a Government-supported takeover in March 2020, the Telegraph can disclose.
Jingye is threatening to close one of the plant’s two blast furnaces and make 2,000 people at the British Steel works redundant unless Grant Shapps, the Business Secretary, agrees to provide state aid totalling hundreds of millions of pounds.
Either of those potential solutions means closing those blast furnaces. It is not possible to go either Net Zero or circular while retaining those blast furnaces. By definition, the stated ambitions for the industry include closing those blast furnaces.
This is true whether it’s done by the Chinese, the government, with or without subsidy, today or in two decades’ time. Net Zero means closing blast furnaces.
It’s actually necessary to make a decision here, it’s not possible to fudge this matter. Blast furnaces and no Net Zero or Net Zero and no blast furnaces? Yes, we know, politics never does like having to make an actual choice but here’s one that cannot be mithered. So, and?