UK’s largest steelworks given £500m to decarbonise, but 3,000 jobs could be lost
Government funding will help the struggling Port Talbot steelworks stay afloat and transition to producing steel with fewer carbon emissions.
Port Talbot is owned by Tata Steel, which will also invest £725m in emissions-cutting efforts, but as many as 3,000 job losses are expected as part of the restructuring deal.
Unions representing workers at the plant complained they had been shut out of negotiations.
Charlotte Brumpton-Childs, GMB national officer, said: “Government intervention in the steel industry is long overdue, but imposing a programme without proper worker consultation is unacceptable.
“GMB has urged ministers and Tata Steel to have a longer-term view on the decarbonisation of steel.
“It is not a just transition if thousands of jobs are sacrificed in the name of short-term environmental gains.”
The carbon reduction plan will see a new electric arc furnace being installed at Port Talbot, which is currently the UK’s largest single carbon-emitting facility. This would replace the existing coal-powered blast furnaces – which are nearing the end of their effective life – and reduce the UK’s entire carbon emissions by around 1.5 per cent.
An electric arc furnace uses an electric current to melt scrap steel or iron and produce steel, whereas blast furnaces use coke, a carbon-intensive fuel made from coal to produce steel.
It represents the first major step towards decarbonisation of the local steel industry, and has the potential to reduce direct emissions by 50 million tonnes over a decade. With almost half the world’s steel currently produced in China, Tata Steel said the new project would also help to bolster the UK’s steel security.
The Department for Business and Trade said that, without substantial investment, Port Talbot would be “at serious threat”, which in turn would risk all of Tata Steel’s UK operations.
Recent annual results from Tata showed it made a pre-tax loss of £279m in the UK. Under proposals, Tata Steel’s balance sheet will be restructured, potentially eliminating cash losses in its UK operations.
Business secretary Kemi Badenoch said: “The UK government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.
“This is an historic package of support from the UK government and will not only protect skilled jobs in Wales but also grow the UK economy, boost growth and help ensure a successful UK steel industry.”
Tata Group chairman Natarajan Chandrasekaran said: “The agreement with the UK government is a defining moment for the future of the steel industry and indeed the industrial value chain in the UK. It has been an absolute pleasure to work with the His Majesty’s Government and the Prime Minister Rishi Sunak in developing the proposed transition pathway for the future for sustainable steelmaking in the UK.
“The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales.”
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