Tata Seeks UK Government Support to Decarbonize Port Talbot Plant

The Financial Times reported that Tata Group has threatened to shut down Port Talbot steel plant if British government does not agree in the next year to provide GBP 1.5 billion of subsidies to help it reduce carbon emissions. Tata Group Chairman Mr Natarajan Chandrasekaran told the Financial Times “A transition to a greener steel plant is the intention that we have. But this is only possible with financial help from the government. We have been in discussions over the last two years and we should come to an agreement within 12 months. Without this, we will have to look at closures of sites.”Financial Times, citing people familiar with the details, reported that “Under decarbonization plans, Tata Steel would close its two blast furnaces at Port Talbot, stop primary steelmaking and instead build two electric arc furnaces, which are less carbon intensive than blast furnaces. Building these electric arc furnaces and decommissioning the blast furnaces would cost around GBP 3 billion, with Tata seeking GBP 1.5 billion from the government.”The subsidy sought by Tata exceeds the government’s current decarbonization funding for the sector, which includes a GBP 289 million Industrial Energy Transformation Fund and more than GBP 1 billion to support energy efficiency, low carbon infrastructure and research and development.Tata Steel UK runs the Port Talbot plant and employs nearly 8,000 people across all its operations. As one of Britain’s largest industrial groups it is among the biggest emitters of carbon dioxide. Executives have been in talks with the government about decarbonization plans, but discussions have stalled.In 2020, the sector accounted for 11.1% of Britain’s industrial emissions and 2.6% of all UK greenhouse gas emissions. Decarbonizing the UK steel industry is vital if the country is to meet its pledge to reach net zero greenhouse gas emissions by 2050. A government advisory body The Climate Change Committee has advised that the sector needs to be near zero by 2035. Around 80% of UK steel is made in blast furnaces at two sites: Tata’s Port Talbot plant in Wales and a British Steel site at Scunthorpe.To create a Net-Zero steel sector in the UK and meet Government targets, a recent report from UK Steel calls for a renewed focus on establishing a positive policy environment for steelmaking. UK Steel Director General Mr Gareth Stace had said “Our report sets out how we want to work with Government in a partnership to deliver a steel sector fit not just for today, but for the future. The current administration is making real, tangible progress on this. The next Prime Minister should accelerate the progress already made to deliver on its Net Zero goals, for sectors like steel. The future of the steel industry in the UK depends on it.”

Tata Seeks UK Government Support to Decarbonize Port Talbot Plant

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