Tata Steel has signed a voluntary agreement with the Dutch government to reduce emissions

Indian steel producer Tata Steel has signed a non-binding letter of intent (JLoI) with the Dutch government to switch to low-carbon steel production at its plant in Eemeden.

Tata Steel plans to reduce emissions at its plant in the country as part of a project that could cost €4-6.5 billion, according to a statement from the Ministry of Climate. The state’s contribution will amount to €2 billion. The Dutch division of the company has also applied to the EU Innovation Fund for €300 million.

The remaining costs are expected to be financed through a combination of funds received by Tata Steel Nederland, project debt financing, and financing from the parent company.

In particular, Tata Steel Nederland aims to decommission blast furnace No. 7 and coke oven No. 2, build a direct reduction plant (DPR) that will initially run on natural gas, as well as electric arc furnaces with increased scrap consumption.

Carbon capture and storage will subsequently be added to the regional development plan to further reduce annual emissions. Ultimately, the use of biomethane and/or hydrogen is also planned, once it becomes economically viable on the necessary scale.

In addition, a number of environmental measures are planned.

As noted, the letter of intent outlines the goals and objectives of the parties. However, it is not binding for the implementation of projects or the provision of subsidies, nor for any other commitments made by the parties, except for negotiations on the conclusion of an individual agreement.

The parties will continue to work on such a binding agreement in the coming months, particularly after the elections and the formation of a new government in the Netherlands. In the process of concluding it, the Tata Steel board of directors will consider the final investment decision regarding the enterprise.

It should be recalled that in the summer of this year, Tata Steel CEO Natarajan Chandrasekaran expressed confidence that the transition to green steel production in the UK and the Netherlands would take place as planned in the next few years.