Henrik Adam says Tata’s competitors in Europe are receiving “billions of pounds” in help to decarbonise
By Huw Thomas
Business correspondent, BBC Wales
The chairman of Tata Steel UK has called for a “level playing field” as it seeks UK government subsidies to decarbonise its Port Talbot steelworks.
Henrik Adam said European competitors were receiving “billions of pounds” from governments to transition to greener operations.
UK ministers have reportedly offered Tata £300m for decarbonisation.
The UK government said it was committed to a “decarbonised, competitive future for the sector”.
The UK government Department for Business and Trade said: “The business secretary knows how critical the steel industry is to Wales, and made her commitment to securing a decarbonised, competitive future for the sector clear when she visited Port Talbot earlier this year.
“We cannot comment on commercially sensitive negotiations.” has been asked to comment.
Port Talbot is home to Britain’s biggest steelworks with two blast furnaces working around the clock to produce steel used in a plethora of products, from tin cans to submarines.
The works is also one of the UK’s largest polluters, and its owners have committed to transforming the site and dramatically reducing its emissions.
“The only thing we are really asking for is a level playing field across our peers in Europe,” said Henrik Adam in an exclusive interview for BBC Wales.
He said Tata is “really committed” to decarbonising the site.
“We are in competition with European steel makers, and so we are not asking for a special deal,” he added.
Tata Steel employs about 4,000 people in Wales
The company needs to be on an equal footing “with competitive grounds on support for investment, but also a competitive landscape on energy costs,” he said.
Both blast furnaces at Port Talbot are nearing the end of their lives, and would require multi-million pound upgrades in the next few years to keep going.
One option is to replace them with electric arc furnaces powered by renewable energy, but this would cost billions of pounds and take years of planning and building.
The cost of construction, and its future energy bills, is something that Tata Steel UK would like the UK government to subsidise.
Image source, Getty Images
Steel is currently responsible for 14% of the climate-warming gases produced by UK industry
While he would not confirm if the reported £300m offered by the UK government was enough, Mr Adam said: “Other nations are pouring billions of pounds into our competitors, and they give support with energy costs.
“That is something which we are considering with quite some, I would say, nervousness. Because if that is happening around us, it’s difficult for us to be competitive,” he said.
The steelworks in Port Talbot is considered to be a strategic asset, and allows the UK to have a local and reliable source of steel production.
Cheaper steel imports, particularly from China, have proved difficult for companies like Tata Steel.
The mission to decarbonise is a common one across the steel industry, according to the independent think tank Green Alliance.
Image source, Green Alliance
Roz Bulleid from Green Alliance says consumers are demanding low carbon steel
“The Port Talbot site in south Wales is one of the largest individual sites in terms of greenhouse gas emissions in the UK, so there really is a significant impact from the steel industry,” Roz Bulleid from Green Alliance said.
New technologies had emerged which could bring down emissions, she said, adding the steel industry was taking the issue seriously.
New jobs
“Demand from customers for cleaner steel is encouraging investment,” she said, but she called on steelmakers to commit more money and to hasten their decarbonisation process.
“Having said that, there are governments around the world investing tens, and sometimes hundreds of millions in lower carbon steelmaking in their own countries,” she said.
“So I can also see why steelmakers here are turning to the government and wondering if they could also get a more direct subsidy as well.”
Green Alliance estimates that turning off two of the UK’s four blast furnaces would have the equivalent impact on emissions of removing 2.4 million petrol cars from the roads.
Asked if the long-term transformation of Port Talbot would result in fewer steel industry jobs, Mr Adam said: “I think it’s too early to say it’s a job cutter, the jobs will change in the profile, there will be new jobs, other jobs.”
The UK government Department for Business and Trade said: “The business secretary knows how critical the steel industry is to Wales, and made her commitment to securing a decarbonised, competitive future for the sector clear when she visited Port Talbot earlier this year.
“We cannot comment on commercially sensitive negotiations.”
Related Topics
Related Internet Links
The BBC is not responsible for the content of external sites.
