Two massive towers stand nearly 300 feet high above a steel-making complex located on the shoreline of Port Talbot, an endangered industrial town in Wales.
These two blast furnaces are the centerpiece of Britain’s largest steel-making facility, a four-square-mile complex of cavernous factories and rusting metal conveyors on Swansea Bay that produces steel that ultimately powers cars, baked beans, Used in coaches and sports stadiums.
But if the plant’s owners, Tata Steel, and the British government have their way, these massive structures could be gone in a matter of years or months. Their plan could turn this Port Talbot facility into one of Europe’s most comprehensive efforts to reduce greenhouse-gas emissions in heavy industry.
Tata, which is based in India, wants to replace the 1950s-era blast furnace and other parts of the plant with one of the world’s largest electric arc furnaces. These devices use entirely different technology: high-voltage current to melt scrap metal from things like factory waste, junked cars and demolished buildings into raw steel, which is then processed by other Tata plants spread across the UK. can be done.
Tata says the plan will reduce carbon dioxide released into the atmosphere here by 80 percent, an important target as the UK aims to reach net-zero carbon emissions by 2050. The government has agreed to contribute 500 million pounds, or about $600 million. To pay the £1.25 billion offer.
But it seems clear that the plan will also result in fewer jobs, and many of Port Talbot’s 4,000 workers say they are worried about serious cutbacks at an industrial site that has supported families for generations Is. He also says some of the steel made at Port Talbot could be replaced with material produced at Tata plants in India or elsewhere, where environmental laws may be less stringent.
Barry Evans, an employee and representative of the community union which represents many steel production workers, said the workforce is “scared and worried”.
This experiment will be closely monitored. Companies and governments – especially in Europe, where concerns about climate change are strong – are struggling with how to clean up steel manufacturing, which accounts for about 7 percent of global carbon dioxide emissions, according to the International Energy Agency. Are.
Steelmakers in Britain and the EU also face rising carbon taxes on their emissions, and some plants in Europe are likely to close or reduce in size.
Dirty as its production may be, steel is important – even strategically. It is essential for the production of wind turbines and electric automobiles needed for the energy transition, and for weapons at a time of rising military spending. Around 340,000 people have jobs in the steel industry in the UK and across the EU.
Those factors have led governments to agree to provide billions of dollars to steelmakers to help pay for emissions reduction measures, but tens of billions of dollars will likely be needed over the next three decades.
Deploying new technologies for green steel would be an important contribution to combating climate change, “but it would come at the cost of tremendous investment,” said Akio Ito, a steel expert at management consultancy Roland Berger.
The planned £1.25 billion investment in Port Talbot is according to some analysts less than half of the investment needed to convert a complex of its size to low-emission technologies. Keir Starmer, leader of Britain’s opposition Labor Party, visited the plant last week and said his party, which is preparing for a general election next year, would be “more ambitious” in preserving jobs there.
Tata officials say the electric furnace being proposed will likely lead to a different approach to steel making. Unlike blast furnaces, which must be run continuously, an electric model can be turned on and off instantly to respond to market conditions such as electricity prices, requiring a smaller workforce, analysts say.
Tata says the increasing amount of clean electricity from several offshore wind farms planned in Britain will make steel produced by the plant even greener in the future. The British government says this change will reduce the country’s emissions by about 1.5 percent.
Tata portrays the plan as a major win. By closing old British facilities, which Tata says are uncompetitive, the company could also take on strong customers such as Jaguar Land Rover, which Tata also owns, as well as businesses in the manufacturing and packaging industries. Can do.
Electrification will also attract customers who want to buy green steel to reduce the carbon footprint of their products. “There is demand for low-emission steel right now,” said James Campbell, an analyst at consulting firm CRU Group.
“This proposal positions Tata Steel UK for a sustainable and profitable future,” Tata Steel Chief Financial Officer Kaushik Chatterjee told analysts on a call last month.
Part of the India-based Tata Group, Tata Steel has been struggling with its British operations since they were acquired in 2007 for a European steel company called Corus in a deal worth about $12 billion, the price of which now seems much higher. Tata’s British business posted an operating loss of £279 million last year.
Workers say the plant is in a sort of limbo as the company and the British government negotiate the size of the subsidy. He says a lack of investment has contributed to the breakdown, while doubts about the future have made it harder to recruit workers. Candidates ask, “Is this job going to be here in a year?” said Barbara Evans, a supervisor in the mill’s energy department.
The company and unions are headed for a tense round of talks over Tata’s plans. Employees say they fear Tata may soon begin closing some older parts of the plant and bringing in steel from India or elsewhere. Alun Davies, a senior community union official, warned that if Tata demanded massive job cuts, “we will go to war with them.”
Tata officials have admitted that imports figure into their thinking. “In transition, we would like to import so that we can continue to supply to our customers,” Mr. Chatterjee said on the call.
The British government said last month that the plan with Tata had “the potential to protect more than 5,000 jobs” across the UK. This is less than the total number of 8,000 that Tata employs in steel operations across the country, meaning 3,000 jobs could be lost.
Still, Britain’s Chancellor of the Exchequer Jeremy Hunt said in a statement: “This proposal is a historic moment for maintaining ongoing UK steel production.”
Electric furnaces – the dominant steelmaking technology in the United States – are unquestionably cleaner than blast furnaces, but there are doubts whether enough scrap would be available in Britain to feed the machine.
Scrap typically comes with impurities, and union officials say the resulting steel can fail to meet specifications of important customers such as automakers.
Tata may have reason to proceed cautiously, wary of damaging its image in a country where it is a major employer and investor. In the summer, in another deal including government subsidies, Tata agreed to invest up to £4 billion in a battery plant, ensuring Jaguar Land Rover will make electric cars in Britain.
In Port Talbot, a town of about 35,000 people, residents have already seen companies leave, including the loss of a Ford engine plant in nearby Bridgend in 2020.
“Without the steel works, this town loses its identity,” said Ryan Morgan, who owns a café called Steel Town Coffee Co. not far from the plant.