British Steel is planning to close down the blast furnaces at its Scunthorpe plant, with the loss of up to 2,000 jobs, according to reports.
The company, which is owned by Chinese firm Jingye, wants to replace them with two electric arc versions which can run on zero-carbon electricity, according to the BBC.
It would build one new electric arc furnace in Scunthorpe, with another at its Teesside plant.
The reports said unions predict the move could ultimately lead to the loss of 1,500 to 2,000 jobs, predominantly at Scunthorpe.
British Steel employs around 4,500 people across the UK.
The company has been approached for comment.
It comes after reports that British Steel is also closing on a Government-funded support package worth around £500 million to help fund the changes.
On Monday, a Government spokesman said: “Our commitment to the UK steel sector is clear, and we continue to work closely with industry, including British Steel, to secure a sustainable and competitive future for the sector and its workers.
“We have offered a generous support package including more than £300 million of investment for British Steel to cut emissions, help safeguard jobs and unlock over £1 billion in stakeholder investment.
“Ultimately, it is for British Steel to manage commercial decisions for the future of the company, and we cannot comment on ongoing commercial negotiations beyond that.”
Earlier this year, the company said it planned to close the coke ovens at its Scunthorpe plant, with the loss of up to 260 jobs.
The latest move is similar to proposals by rival Tata Steel earlier this year to switch the two coal-fired blast furnaces at its Port Talbot site to electric arc versions. The changes are set to affect as many as 3,000 jobs.
