“Ultimately, we have to find a way to do that transformation in Scunthorpe,” Industry Minister Chris McDonald told POLITICO in an interview last December, explaining British Steel “needs to be decarbonized.”
McDonald said he’s “been clear that we expect that transformation to be a partnership between government and the private sector.”
Merger push
The government is now left holding an asset long past its end of life with little to whet the appetites of potential buyers.
With the EU’s carbon border tax and new steel quotas in Brussels factoring into its future commercial appeal, “everything has to align policy-wise to make investment attractive,” said a second steel industry figure.
Many in the steel industry see a way forward to appeal to investors if the government shoulders British Steel’s liabilities and merges the firm with Speciality Steel UK (SSUK), which has arc furnaces, after the government took control of the former Liberty Steel Group as it entered liquidation last year.
“Liberty has got the biggest electric arc furnace at the moment. The aerospace, defense and oil and gas sectors are selling well. It would make sense to put them together as an asset,” said a third steel industry figure. When it comes to national security, “you would want speciality steels in your artillery.”
“There may be some opportunity to tie the two plants together,” the first industry figure said. “It’s definitely worth looking at.”