UK govt, Tata Steel announce £1.25bn investment for greener steel

The UK Government and Tata Steel have confirmed a joint investment package of £1.25 billion for sustainable steel production in Port Talbot. This includes a UK Government grant of up to £500 million, marking one of the largest government support packages ever. The investment is aimed at modernizing the facility, reducing carbon emissions, and preserving skilled jobs, pending consultation and regulatory approvals.

Electric Arc Furnace to Replace Coal-Powered Blast Furnaces

The investment focuses on the introduction of a new Electric Arc Furnace at Port Talbot, which is currently the UK’s largest single carbon emitter. This new furnace will replace the existing coal-powered blast furnaces, reducing the UK’s overall carbon emissions by approximately 1.5%.

Over 5,000 Jobs Expected to be Safeguarded

Employing over 8,000 people, including those at Port Talbot, Tata Steel also indirectly supports around 12,500 jobs in the supply chain. The proposed investment has the potential to safeguard over 5,000 jobs across the UK, thanks to intervention from the UK Government.

£100 Million in Funding for Transition Support

“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,” said Business and Trade Secretary Kemi Badenoch. Chancellor of the Exchequer Jeremy Hunt added, “This proposal is a landmark moment for maintaining ongoing UK steel production.” The government also plans to establish a dedicated transition board, backed with up to £100 million in funding, to support affected employees and the local economy.

Significant Reduction in Carbon Emissions Expected

The proposed shift to sustainable steelmaking at Port Talbot is estimated to reduce the UK’s overall business and industry carbon emissions by 7%, Wales’s emissions by 22%, and the Port Talbot site’s emissions by 85%.

Tata Group Chairman Speaks on the Deal

“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,” said Tata Group Chairman N Chandrasekaran. “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.”

This landmark investment follows other major commitments by the Tata Group, including a £4 billion battery gigafactory creating 4,000 jobs. Alongside the UK Government’s proposal for the Celtic Freeport, the investment could unlock thousands of new local jobs and boost both the South Wales and wider UK economy.