The good news: the UK’s most polluting industrial site will close, reducing CO emissions by 1.5%2 of the entire country. The bad news: this comes at the cost of 2,800 job losses and the end of the UK’s ability to produce steel directly from iron ore.
On Friday 19 January, Indian group Tata Steel announced the closure of two of its blast furnaces in Port Talbot, Wales. Their motivation is both financial and environmental. The site is currently losing around 1 million pounds (1.16 million euros) a day. Tata recalls that it has invested £5 billion in these facilities and its wholly-owned British subsidiary since its acquisition in 2007.
At the same time, the carbon footprint of the site – about 6 million tons of CO2 per year – which still runs on coke, a coal derivative, requires a change in technology. Tata announced that it will shut down the first blast furnace in mid-2024 and the second later that year. Instead, it will create a furnace that works with a “Electric Arc”which will produce steel from 2027. To do this, it will invest 1.25 billion pounds: 750 million pounds from its own pocket, to which the British government will add 500 million pounds.
“The Hard Way”
The company rejected the unions’ proposal to keep one of the two blast furnaces operational until 2032, citing the high cost. Construction of a new facility is also easier and less expensive if the entire location is enclosed. With new technology, CO emissions2 85% of the site will be down.
Tata, which employs about 8,000 people in the United Kingdom, including 4,000 in Port Talbot, will cut 2,500 jobs in the short term, with a further 300 added over three years. “We are choosing the hard path, but it is the right one”, assured Thatchat Vishwanath Narendran, General Director of Tata Steel. He emphasizes that he has an investment “UK steel production highest in a decade”.
Tata’s decision follows British Steel, another British steel producer, which announced in November 2023 that it would shut down two of its blast furnaces, replacing them with two electric arcs, which should be operational in 2025. In the United Kingdom, once one of the world’s Steel industry pioneers, so no more blast furnaces.
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