An important development in the United Kingdom: Tata Steel has now received a £500 million (€590 million) British government grant to green its aging steel plant in Port Talbot, Wales. The new Labor government also agrees to cut 2,500 jobs.
Under the previous Conservative government of Rishi Sunak, there was also an advanced scheme for greening and state aid. This was strongly criticized by the Labor Party. According to current Economic Affairs Minister Jonathan Reynolds, conditions for the layoffs have now improved. While Reynolds was still in opposition, he demanded job guarantees, but none came.
New Labor government agrees to cut 2,500 jobs
Indian Tata Steel has two major plants in Europe in Wales and IJmuiden. In the Netherlands, the company is negotiating with the government about state support for the greening of a factory complex with the largest CO.2emitter in the country. This is about a bailout amounting to more than 1 billion euros, according to leaked figures.
Electric arc furnace
Tata had already shut down one blast furnace at Port Talbot and will soon do the second one. These two coal-fired blast furnaces will be replaced by an electric arc furnace, which will process recycled metal (scrap). This stove emits very less CO2 outside. The parent company itself contributes around £750 million.
In the United Kingdom, unions have reacted critically to the contracts. “We know there is a better plan,” the community union wrote in a statement. The unions wanted one of the two blast furnaces to remain open longer. Tata Steel in the UK now employs 8,000 people, including 4,000 at Port Talbot in Wales. In total, the group will employ just 5,000 people in the UK in the future.
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Port Talbot is also home to the polluting Tata Steel plant. ‘It’s a pit, but it’s a great pit’
Port Talbot was the largest CO for a long time2emitter in the country, until it recently shut down one of its two blast furnaces. The factory complex is considered very outdated and has not made any money since its takeover by Tata in 2007 and has mainly incurred losses. This led to a lot of frustration in IJmuiden over the years, where there was a feeling that profits from the Netherlands were being used to offset losses in Wales.
In the Netherlands, this would involve aid of more than 1 billion euros
With the closure of blast furnaces in Wales, the UK is likely to no longer be able to make new steel, but only to melt scrap. Another major British steel mill, its Chinese owner Jingye Steel Group, is also looking at developing electric arc furnaces to melt scrap. There are serious concerns about this development, as it calls into question, for example, whether the UK can build more high-quality rail lines.
In the Netherlands, Tata Steel (approximately 8,000 employees) aims to go green in a completely different way by making steel based on natural gas and then hydrogen. New steel is made from iron ore. Climate and Green Development Minister Sophie Hermans (VVD) is currently negotiating with Tata Steel over the terms of possible state aid to relocate the factory.
