India-based steel producer Tata Steel is looking to the UK government to provide favorable policies and fiscal support to help the transition to green steelmaking at the Port Talbot works in South Wales, Fastmarkets heard on Monday October 17.Tata owns the Port Talbot plant, the largest remaining steelworks in the UK. It hopes that the UK government will provide a £1.5 billion ($1.68 billion) fiscal package while it faces weak market conditions, increasing production costs and significant pressure to move toward more sustainable methods of steel production.
The weak market and the other challenges faced by steel producers across Europe and the UK have resulted in calls from various parts of the UK steel industry for government support.
Without such support, and given the challenges, business for Tata Steel in the UK could lose viability, Fastmarkets heard.
The steel producer’s call for government support was a reflection of the difficulties faced by producers trying to invest significantly into technologies whose benefits would only be felt in the long term, while market conditions were still depressed and the outlook remained highly uncertain.
“Tata Steel is in active and detailed discussions with the UK government with relation to the future of the UK business,” a Tata Steel spokesperson told Fastmarkets. “Tata Steel is not currently in any discussions with potential buyers for the UK business.”
To remain viable while transitioning to green steel production, the Port Talbot plant would require significant investment into alternative technologies, as well as favorable policies that would help it to remain competitive while it transitions to green steel methods of production, a spokesperson for the company said.
Tata Steel has been responsible for hiring 8,000 employees across the country. If it were to withdraw from the UK steel industry, there would be a decrease in the country’s steel output as well as a considerable loss of jobs. This in turn could increase the price of domestic supply or result in a greater reliance on imports, Fastmarkets heard.
The green steel transition is in line with the company’s goal to produce exclusively carbon-neutral steel in the UK and its other assets in Europe by 2050.
Published by: India-Inés Levy