Indian-owned Tata Steel is set to cut about 3,000 jobs at its plant in Wales, as the steel industry struggles to finance greener production. The company is expected to announce on Friday the closure of two blast furnaces at the Port Talbot steelworks, resulting in the loss of over one-third of the staff. This development comes after talks with unions, who described it as a “crushing blow”. Tata Steel stated that it has been engaging with trades unions on creating a sustainable green steel future for Tata Steel in the UK. The company also mentioned that any formal announcements about their proposals for the future will be shared with their employees first.
Last year, the UK government provided £500 million ($634 million) to fund the production of greener steel at the country’s largest steelworks, with the aim of safeguarding jobs. However, it was acknowledged that 3,000 jobs were still at risk. The funding for an electric furnace helped save 5,000 jobs out of the more than 8,000 at the steelworks.
The news of the potential job losses was met with concern from unions. Charlotte Brumpton-Childs, a senior official at the GMB union, stated that such large-scale job losses would have a detrimental impact on Port Talbot and UK manufacturing as a whole. The unions had presented a realistic and costed alternative that would have prevented any compulsory redundancies, but their proposal was not taken into consideration.
Meanwhile, the Italian government initiated the process of placing the struggling former Ilva steelworks under state supervision to protect thousands of jobs. The site’s operator, Acciaierie d’Italia, which is majority-owned by ArcelorMittal, received a letter regarding this matter. In Wales, the Port Talbot steelworks is the biggest carbon emitter in the UK, and the government has been working to support Tata Steel and British Steel in replacing their dirty blast furnaces. Tata Steel had threatened to close the plant unless it received state aid to decarbonize production and reduce emissions. The government believes that replacing the coal-powered blast furnaces at Port Talbot would contribute to a 1.5% reduction in the UK’s carbon emissions. Experts have suggested that green hydrogen could be beneficial for the steel industry, but significant investment is required to produce sufficient clean energy.
Apart from the challenges related to green production, the steel sector has also faced rising costs due to surging energy prices following Russia’s invasion of Ukraine.
