The UK government has passed an emergency law to prevent the shutdown of the last factory in the country that can produce virgin steel, steel made from raw materials rather than recycled scrap.

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This decision gives the government power to step in and take control of the British Steel plant in Scunthorpe, currently owned by a Chinese firm.

Why was the law passed?

On Saturday, in an unusual weekend session, MPs approved the Steel Industry (Special Measures) Bill without any resistance. The law aims to stop the closure of the vital Scunthorpe plant, which employs several thousand people and plays a key role in the construction and rail sectors.

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Watch: UK recalls Parliament as British Steel faces daily £700,000 loss, govt aims to take control

Prime Minister Keir Starmer said the government had to act quickly to stop the blast furnaces from being turned off and protect what remains of the UK’s steel-making capabilities. Speaking to steelworkers in a nearby village hall, he said the move was “in the national interest.”

“The most important thing is we’ve got control of the site,” Starmer said. “We can make the decisions about what happens, and that means that those blast furnaces will stay on,” he added.

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The intervention follows recent protests at the plant. There were also reports on Saturday morning that workers had stopped executives from the Chinese parent company Jingye from accessing key parts of the site.

Also read: Explained: Why UK is rushing to save its last steel plant and what Trump, China and India's Tata Steel have to do with it?

Is this a nationalisation of the steel plant?

While the bill gives the government control, it does not yet amount to full nationalisation. Business Secretary Jonathan Reynolds told Parliament that state ownership is still “on the table” and is possibly the “likely option.” However, he clarified that “this legislation does not transfer ownership to the government”, and that step would need further action.

No private firm has stepped forward to invest in the plant, and ministers fear that shutting it down would damage the UK’s economic future.

What’s going on with Jingye?

Chinese company Jingye bought British Steel in 2020, claiming to have invested over £1.2 billion to keep it running. However, the firm says the Scunthorpe site is now losing about £700,000 a day and is no longer financially viable.

Reynolds said that Jingye wanted to supply the plant with slab steel from China instead of continuing full operations in the UK. He also revealed that the firm asked the government to hand over “hundreds of millions of pounds” without restrictions and refused a condition to keep the blast furnaces in working condition.

According to Reynolds, “the effective market value of this company is zero.”

What powers does the new law grant?

The bill gives the government the authority to take control of the plant’s assets if the company does not follow orders to keep the furnaces running. It even includes criminal penalties if executives fail to comply. This strong intervention shows how seriously the government is treating the threat to the UK’s steel industry.

Why is Scunthorpe so important?

Scunthorpe’s steelworks is now the last place in Britain that can make virgin steel. The process uses raw materials rather than recycled metal, producing higher quality steel needed for large-scale building projects and railway infrastructure.

Since Tata shut its blast furnace in Port Talbot last year, Scunthorpe has been the only remaining site of its kind. British Steel says US tariffs imposed by President Donald Trump added to the plant’s financial problems.

British Steel traces its roots back to the Industrial Revolution, but it was formally established in 1967 when the Labour government nationalised the industry. At the time, nearly 270,000 people worked in the sector. The Scunthorpe plant has stood through many changes, but Saturday’s emergency law may decide whether it remains part of Britain’s future.