The company said its energy costs last year increased by 190 million pounds ($230 million).
"Decisive action is required because of the unprecedented rise in operating costs, surging inflation and the need to improve environmental performance," it said in a statement.
British Steel said it plans to shut coke ovens at its Scunthorpe plant, northern England, which would help the group to also "build a green and sustainable future".
The announcement comes as British Steel, owned by Chinese group Jingye since 2020, seeks financial support from the UK government.
Responding to the planned job cuts, the Conservative government expressed its disappointment.
"It is very disappointing British Steel has chosen to take this step for its employees while our negotiations with the sector are ongoing," it said.
"We stand ready to support employees impacted... and will continue to work with the company to try and find a decarbonised, sustainable and competitive solution for the business and the wider sector, which plays a vital role in the UK economy."
Britain reportedly plans to offer grants totalling 600 million pounds to help British Steel and Indian-owned Tata Steel UK replace highly polluting blast furnaces with less carbon-intensive technology.
"It's important we have the correct policies and frameworks in place to back our drive to become a clean, green and successful company and we're continuing to discuss this with the government," British Steel chief executive Xifeng Han said in the statement.
The company employs about 4,000 workers in the UK.
The Unite union said it would "fight to defend every job under threat".
"The proposed job losses are a direct result of" Jingye's "failure to make good on its commitment to make major investments in the plant", it said.
The union also denounced the "government's abject inability to produce a coherent industrial strategy to protect the UK's steel making capability".
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