According to various sources, Tata Steel is on the brink of finalising a £500 million funding agreement with the UK government.
The deal would oblige the steel giant to construct electric arc furnace steelmaking, aimed at lowering carbon emissions, as part of its commitment to a sustainable future in the UK.
Additionally, the initiative could serve as a catalyst for linking the plant with offshore floating wind projects in the Celtic Sea, further solidifying its commitment to sustainability in the UK.
The area’s MP, Stephen Kinnock, has expressed optimism over emerging reports that the UK government is nearing the final stages of a funding agreement with Tata Steel aimed at preserving the future of the Port Talbot plant. However, Kinnock emphasised that the workforce of Tata Steel must back any new arrangement.
According to Sky News, the prospective deal could inject £1 billion into the plant, albeit at the possible expense of as many as 3,000 UK jobs in the years ahead. The draft proposal reportedly entails a £500 million commitment from Westminster.
Sky News also revealed that Tata Steel’s parent company would contribute £700 million in capital investment. These funds would support the transition from the plant’s current coal-fired blast furnaces to more eco-friendly electric arc furnaces, which are not only greener but also require fewer workers for steel production.
A Tata Steel spokesperson said:
“Tata Steel is continuing to discuss with the UK government a framework for continuity and decarbonisation of Steel making in the UK amidst very challenging underlying business conditions given that several of its heavy end assets are approaching end of life. Given the financially constrained position of our UK business, any significant change is only possible with government investment and support, as also seen in other steel making countries in Europe where governments are actively supporting companies in de-carbonisation initiatives.
The UK government declined to comment.