Amid little hope of receiving a £1.5 billion subsidy package from the UK government for the transition to green energy, Tata Steel is likely to cease its UK operations, according to a ET report.
Tata Steel has the UK’s largest steelworks at Port Talbot in South Wales and employs around 8,000 people across its operations in the country. ET reported that Tata Steel is seeking a way out of the UK as it does not expect to get funding from the current UK government led by Liz Truss.
The plan is for Tata Steel to close its two blast furnaces at Port Talbot, stop making primary steel, and build two electric arc furnaces instead. This is important to keep the plant functioning. These arc furnaces will recycle scrap steel and are less carbon intensive than blast furnaces. Building electric arc furnaces and decommissioning existing blast furnaces will cost around £3 billion ET said report.
“As part of the UK’s decarbonization journey and the country’s rising carbon costs, Port Talbot will need to turn to alternative technologies to stay afloat,” a Tata Steel source told the publication.
Tata Group chairman Natarajan Chandrasekaran earlier said in July, “We have been in discussions for the past two years and we should come to an agreement within 12 months. Without this, we will have to see the closure of the site.”
An executive close to development told ET“Getting out of business while also supporting the local community has never been a philosophy of our group, but must be recognized and supported by the government as well.”
A spokesperson for Tata Steel told the publication that the company is not currently in discussions with potential buyers for the UK business. The Indian steel giant is one of Europe’s leading steel producers, with steel manufacturing in the Netherlands and the UK, and manufacturing plants across Europe. The company’s tube products are used in many industries, including construction, machine fabrication, energy, and automotive production.
In June 2022, Tata Steel said it had set goals to produce net-zero steel by 2050 and reduce CO2 emissions by 30 percent by 2030.
(With input from agencies)