UK allocates £13.5 mn in funds to support Tata Steel's decarbonisation

London: The British government said it has begun supporting those affected by Tata Steel UK's decarbonisation process with the release of an initial £13.5 million of funding, also available to affected workers for them to retrain or acquire new skills for the employment market. In a statement from the Wales Office on Monday, the government said the funding from the Tata Steel/Port Talbot Transition Board fund will support local businesses which are heavily reliant on Tata Steel as their primary customer, allowing them to turn towards new markets and customers where necessary.

At a meeting last week, the board discussed how the funding will be allocated, monitored and evaluated to ensure “value for the taxpayer. This funding is an important step towards supporting workers affected by Tata Steel's transition and businesses in the wider supply chain,” said Jonathan Reynolds, UK Business and Trade Secretary. “We're working in partnership with trade unions and industry to secure a green steel transition that's right for the economy, our talented workforce and local communities for generations to come, and our negotiations with Tata remain ongoing,” he said.

Last week, the Transition Board received an update from Tata Steel UK on the company's decarbonisation project and how it will be supporting those impacted. Welsh Secretary Jo Stevens announced that more than 50 businesses so far have signed a pledge to support any workers forced to leave their jobs in the Port Talbot steelworks in Wales. “Negotiations with Tata Steel on the future of the site will continue separately. But this government will not wait for a crisis to overtake us before acting. We are putting a safety net in place now to ensure we can back workers and businesses, whatever happens,” said Stevens. “Steelmaking is the lifeblood of communities in Wales, but so too is the support of local businesses. What they are offering will make a real difference to suppliers and staff,” she said.

The Mumbai-headquartered steel major has meanwhile been holding an informal consultation process in advance of Tata Steel UK submitting a planning application for its new Electric Arc Furnace, which is due to start operations in late 2027. “What we are doing here is a huge transformation of the steelworks to electric arc furnace, low CO2 steelmaking, which has implications for the entire community," said Tata Steel UK CEO Rajesh Nair during a recent visit to Wales. "People want to know how it is going to affect their day-to-day lives in terms of dust, noise and so on. We've been able to help them understand how this new investment and new technology will make a significant difference to these environmental issues in particular,” Nair said.

The new furnace is designed to make steel using UK-sourced scrap metal as its raw material. By restructuring our UK operations, we will be able to sustain the business as we transition to new electric arc furnace technology, Tata Steel UK has previously said. The new Labour Party government has pledged a reset of the relationship between the devolved Welsh government and the DBT – with both having Labour in charge, unlike under the previous Conservative Party regime at Downing Street.