Tata Steel threatens to close UK plant due to lack of state support

The company has been asking the British government for £1.5 billion for a decarbonization program for two years, but the authorities are silent

The Indian conglomerate Tata Group has threatened to close the British steel plant in Port Talbot due to the lack of government assistance for a £1.5bn to help reduce carbon emissions. The Telegraph reports about it.

A division of Tata Steel UK has been negotiating with the government for decarbonization plans over the past two years, but those have now stalled. At the same time, Tata Steel is one of the largest industrial companies in the UK, and, accordingly, the largest source of carbon emissions.

“A transition to a greener steel plant is the intention that we have . . . But this is only possible with financial help from the government,” Natarajan Chandrasekaran, chairman of Tata Group, told the Financial Times. He added that a deal would need to be struck in the next year or the site would close.

The Port Talbot plant currently uses natural gas and coal in its production. To switch to electricity production or hydrogen, the company requires large investments. Closing the plant, the automotive industry, construction and other industries will suffer losses.

The total cost of refurbishing the plant reaches £3 billion, and Tata Steel is ready to cover half. For these funds, the company intends to get rid of blast furnaces and replace them with electric arc furnaces.

Tata Steel UK has nearly 8,000 employees. The division posted a pre-tax profit of £82m in 2021/22, compared to a loss of £347m the previous year amid record steel prices and a recovery in demand. It is not clear how much of this profit related to the Port Talbot site.

Tata Steel has started a projec to capture CO₂ in blast furnaces at a plant in IJmuiden, the Netherlands. As a result, CO₂ emissions in steel production can be reduced by 30%.

However, the green achievements of Tata Steel are not so obvious against the background of the fact that in February 2022 the Dutch Public Prosecutor’s Office filed criminal case against Tata Steel Netherlands on charges of deliberately polluting the environment.

Recently Tata Steel UK and Tata Steel Netherlands announced the development of detailed plans for the transition to low CO₂ technologies with producing CO2-neutral steel in Europe by 2050