DBT’s Proposed Subsidy to Tata Steel UK

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The Department for Business & Trade seeks approval for a £500m capital grant to Tata Steel UK for greener steel production in Port Talbot. The investment, a part of a £1.25 billion plan, aims to reduce carbon emissions by 1.5%. SAU will evaluate the subsidy's compliance within 30 days, accepting comments till January 9, 2024.


The Department for Business and Trade (DBT) has submitted a proposal to provide Tata Steel UK Limited with a substantial capital grant of up to £500 million. This grant intends to facilitate the adoption of more environmentally friendly steel production methods at the Port Talbot site, currently identified as the UK’s largest single industrial carbon emitter.

The proposed financial assistance forms part of a larger potential investment by Tata Steel UK Limited, totaling £1.25 billion. This investment plan includes the replacement of existing Blast Furnaces at Port Talbot with an Electric Arc Furnace, a move anticipated to reduce the UK’s overall carbon emissions by approximately 1.5%.

The proposed subsidy, specifically allocated for decarbonization purposes, will be exclusively utilized for installing the Electric Arc Furnace and associated plant and works. It is structured to be disbursed in arrears, subject to agreed-upon milestones, reimbursing Tata Steel UK Limited for approved capital expenditure.

This substantial investment by DBT, contingent upon employee consultations, aims to modernize steel production processes, significantly contributing to the nation's efforts to combat climate change and reduce carbon emissions.

The Subsidy Advice Unit (SAU) will assess the proposed subsidy's compliance with subsidy control requirements. Interested parties have until January 9, 2024, to submit comments relevant to SAU’s evaluation.


DBT's proposed subsidy to Tata Steel UK, earmarked for greener steel production at the Port Talbot site, stands as a significant step towards reducing industrial carbon emissions. This substantial capital grant, subject to SAU evaluation, aims to foster a transition towards more sustainable steel manufacturing, aligning with the UK’s commitment to combat climate change.

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