The decision is subject to the UK government's approval, with talks still ongoing.
British Steel has also applied to North Lincolnshire Council to build another electric arc furnace at its Scunthorpe site, the outcome of which is expected to be announced soon.
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The proposed electric arc furnaces would replace the ageing iron and steelmaking operations at the Scunthorpe facility, which generate the bulk of the site's carbon emissions. The company proposes maintaining current operations until a transition to electric arc steelmaking.
The construction of electric arc furnaces is part of a £1.25bn decarbonisation plan by British Steel.
According to British Steel President and CEO Xijun Cao, the electric arc furnaces at Teesside and Scunthorpe would help the business reduce its CO2 emissions by more than 75%.
Cao said: “We are confident our proposals will help secure the low-embedded carbon steelmaking the UK requires now and for decades to come.”
Electric arc furnace v basic oxygen steelmaking
Steelwork contractors are reporting a significant increase in client requests for steel manufactured using the electric arc furnace method, which uses scrap steel, rather than the traditional basic oxygen steelmaking process that creates steel mostly from iron ore, although it also uses a moderate amount of scrap steel in the process.
However, although electric arc furnace steel contributes towards decarbonising the steel sector, the British Constructional Steelwork Association (BCSA) advises that simply insisting on this method is not the best way to reduce global carbon emissions.
"While electric arc furnace steel has a lower embodied carbon than BOS steel today, there is not currently enough scrap to meet the global demand for steel through electric arc furnace manufacturing alone," BCSA's CEO, Dr David Moore, told CM recently.
"So, while specifying electric arc furnace steel for one project will minimise the carbon footprint of that project, it will not reduce global carbon emissions as it will merely displace basic oxygen steelmaking steel to another project.”
