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Tata boss calls for more government help to meet green targets

By Nagasunder in UK Business & Employment News, posted June 13, 2023

The chairman of Tata Steel UK has emphasized the need for a fair and level playing field as the company seeks government subsidies from the UK to transition its Port Talbot steelworks to a decarbonized operation.

Henrik Adam said European competitors were receiving substantial government funding amounting to billions of pounds to facilitate their shift to greener practices.

While the UK government has reportedly offered Tata £300 million for decarbonization, its commitment to a decarbonized and competitive future for the steel sector has been stated.

Port Talbot is home to the largest steelworks in Britain, operating two blast furnaces continuously to produce steel for various products.

However, the site is also a significant source of pollution, and its owners have pledged to transform it and significantly reduce emissions.

Henrik Adam stated in an interview with BBC Wales Tata is fully committed to decarbonizing the site.

He clarified the company is not seeking preferential treatment but rather a level playing field with its European counterparts in terms of investment support and energy costs.

With both blast furnaces at Port Talbot nearing the end of their operational lives, substantial investments amounting to millions of pounds would be required in the coming years to keep them running.

One option under consideration is the replacement of these furnaces with electric arc furnaces powered by renewable energy.

However, the cost of this would go into the billions and would mean extensive planning and construction.

Tata Steel UK is seeking government subsidies to help with the building costs and future energy expenses associated with the transformation.

While Henrik Adam did not confirm whether the reported £300 million offered by the UK government was enough, he expressed concern about the substantial support and energy cost advantages provided to their competitors by other nations.

He said circumstances make it challenging for Tata Steel to remain competitive.

The steelworks in Port Talbot are considered a strategic asset for the UK, providing a local and reliable source of steel production, particularly with the challenges posed by cheaper steel imports from countries like China.

According to the independent think tank Green Alliance, the mission to decarbonize is a shared objective across the steel industry.

The Port Talbot site's significant greenhouse gas emissions make it crucial for the sector's overall impact on the environment.

While new technologies offer emission reduction possibilities, Green Alliance's Roz Bulleid stressed the need for increased investment and an accelerated decarbonization process within the steel industry.

Governments worldwide are already investing substantial amounts in lower carbon steelmaking in their respective countries, prompting steelmakers in the UK to consider direct subsidies from the government.

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Green Alliance estimates decommissioning two out of the UK's four blast furnaces would have a similar emissions impact as removing 2.4 million petrol cars from the roads.

When asked about the potential impact on jobs resulting from the long-term transformation of Port Talbot, Henrik Adam noted it is too early to label it as a job-cutting measure.

He suggested that while some jobs may change or transition, new employment opportunities will also emerge.

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