Up to 6,000 jobs across the steel and oil refining industries are facing cuts this September, according to a warning from the UK government. Reports from the BBC indicate that 2,800 roles will be lost at Port Talbot in Wales, while up to 3,000 could be cut at British Steel in Scunthorpe. Another 400 positions are set to go at Scotland’s Grangemouth oil refinery. Labour unions had hoped that reinvestment from the new government could limit job losses, but the recent news has reportedly led to such promises being dashed.
The UK government has been working to secure a grant for Tata of £500m, which would go towards the £1.25bn cost of building an electric arc furnace to replace Port Talbot’s last remaining blast furnace. Blast furnaces use coke in steel production, which generates carbon dioxide. Electric arc furnaces are mostly used for remelting scrap steel but it isn’t a perfect replication of steel grades produced in blast furnaces.
Labour previously promised £2.5bn to revitalise the UK’s steel industry, but the new government is echoing its predecessor, stating that public money is only available to invest in new, greener steel production facilities. Environmental groups have been pushing for a transition to a de-carbonised steel industry to reach climate goals. However, according to Department for Business, Energy and Industrial Strategy minister Nadhim Zahawi, steel production is calculated to generate 15 million tonnes of CO2 by 2050, which is more than 5% of the UK’s current carbon footprint.
Representatives from local unions are presenting a redundancy deal, which would see converted workers earn 2.8 weeks of earnings for every year of service up to 25 years. They are also allowed to participate in a skills and retraining scheme which pays £27,000. Unions are hopeful that they won’t have to make immediate redundancies as many vacancies went unfilled by recent departures. Despite this optimism, some believe that the UK will be left without the ability to make ‘virgin’ steel when both Port Talbot and Scunthorpe’s blast furnaces’ are decommissioned. However, other insiders have suggested that the coking coal and iron ore used in blast furnaces can easily be imported from abroad
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