Tata Steel is expected to invest £1.25bn, including a UK Government grant worth up to £500m – one of the largest government support packages in history – in a new Electric Arc Furnace for greener steel production at Port Talbot, which is currently the UK’s largest single carbon emitter.
This would replace the existing coal-powered blast furnaces – which are nearing the end of their effective life – and reduce the UK’s entire carbon emissions by around 1.5% as a result.
Tata Steel UK employs over 8,000 people, including at Port Talbot, which would otherwise be under serious threat without substantial investment to guarantee its future. Tata Steel also supports around 12,500 further jobs in the upstream supply chain.
Thanks to UK Government intervention, it is expected that the proposal announced today – which remains subject to information and consultation processes led by Tata Steel – has the potential to safeguard over 5,000 jobs across the UK.
The UK Government would also ensure a broad range of support for any staff who are affected by the transition, working with the Welsh Government and Tata Steel to establish a dedicated transition board to support both affected employees and the local economy, with up to £100m funding.
Business and Trade Secretary Kemi Badenoch said: "The UK Government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.
"This is an historic package of support from the UK Government and will not only protect skilled jobs in Wales but also grow the UK economy, boost growth and help ensure a successful UK steel industry."
Tata Group Chairman N Chandrasekaran said: "The agreement with the UK Government is a defining moment for the future of the Steel Industry and indeed the industrial value chain in the UK. It has been an absolute pleasure to work with the His Majesty’s Government and the Prime Minister Rishi Sunak in developing the proposed transition pathway for the future for sustainable steelmaking in the UK.
"The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales. We look forward to working with our stakeholders on these proposals in a responsible manner."
The transition to sustainable steelmaking at Port Talbot is also expected to reduce the UK’s entire business and industry carbon emissions by 7%, Wales’s overall emissions by 22%and the Port Talbot site’s emissions by 85%.
