UK welcomes 'major step forward' in Tata Steel's green steel growth plans

London: Tata Steel UK on Tuesday announced that its proposals to deliver a state-of-the-art Electric Arc Furnace for greener steelmaking in Port Talbot, South Wales, has got the requisite approval from the local council.

Business and Trade Secretary Jonathan Reynolds welcomed the "major step forward" in the £1.25 billion joint investment plan for the transformation of Britain's largest steelworks with the Indian steel giant.

Supported by government funding of £500 million, the investment strategy is aimed at preserving 5,000 Tata Steel UK jobs and cutting on-site CO2 emissions by 90 per cent compared to the previous blast furnace-based steelmaking -- reportedly equivalent to 1.5 per cent of the UK's total direct CO2 emissions.

"This is a major step forward in securing a bright, long-term future for steel in South Wales, following the improved deal for Port Talbot's transition we agreed with Tata Steel and the next phase of our Plan for Steel -- unveiled last week," said Reynolds.

The planning application to the Neath Port Talbot Council's Planning Committee sought permission to construct an Electric Arc Furnace, two new Ladle Metallurgy Furnaces for secondary steelmaking, and supporting infrastructure.

"We are very pleased to have secured approval to build sustainable steelmaking in Port Talbot. Amidst a challenging global market, this is a significant milestone for the project and we are committed to begin large-scale work on site this summer, ahead of the Electric Arc Furnace starting up from the end of 2027," said Rajesh Nair, CEO of Tata Steel UK.

"This £1.25 billion investment is the most significant investment made in the UK steel industry in decades. The facility will secure high-quality steel production, preserve thousands of jobs and safeguard steel making in Port Talbot for generations to come," he said.

An electric arc furnace uses electricity to melt predominantly scrap steel -- of which there is an abundance in the UK -- rather than requiring imported iron ore and coal.

The site's ageing iron and steelmaking assets, which included the harbour, coke ovens, sinter plant and blast furnaces, were closed last year.

Tata Steel UK said this is its latest major milestone on the road to transitioning to green steelmaking.

In December 2024, the Mumbai-headquartered company signed a deal with JCB for the supply of green steel, and last month, the company appointed Sir Robert McAlpine as the project's mains works contractor. In October last year, Tata Steel appointed world-leading metals technology manufacturer Tenova to supply the new furnace.

Tata Steel is the largest steelmaker in the UK with primary steelmaking at Port Talbot in South Wales supporting manufacturing and distribution operations at sites across Wales, England, and Northern Ireland as well as Norway, Sweden, France, and Germany.

Under its new 'Plan for Steel', the UK government has laid out an "ambitious long-term vision for the steel industry" for the country and committed up to £2.5 billion through the National Wealth Fund (NWF) and other routes. This is in addition to the existing £500 million investment in the building of the Electric Arc Furnace at Tata Steel UK's Port Talbot site.

"With an increasingly decarbonised electricity supply, and increased use of scrap steel in production, the UK industry is well-positioned to be at the forefront of the global transition to green steel," Reynolds states in the report, which is now open for stakeholder consultation.