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Released February 06, 2023 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. government is seeking a 10-year jobs guarantee from struggling steelmakers British Steel Limited (BSL) (Scunthorpe, England) and Tata Steel U.K. (Mumbai, India) before releasing a £600 million (US$744 million) rescue package.
The future of the U.K's floundering steel sector is now hanging in the balance according to the country's largest union, UNITE, which recently stated that the sector was "a whisker away from collapse." According to the latest reports from Sky News, the U.K. business secretary, Grant Shapps, has told British Steel and India-owned Tata Steel that they have to guarantee a certain number of U.K. jobs until 2033 in order to unlock up to £300 million (US$372 million) each in government aid. British Steel employs about 4,000 people across U.K. operations, including its Scunthorpe steelmaking plant, while Tata employs 3,500 people at its Port Talbot steelworks in south Wales. Last month, Industrial Info reported on growing pressure on the U.K. government from its own ministers to save British Steel. For additional information, see January 9, 2023, article--Pressure Grows on U.K. Government to Save British Steel.
Details of the proposed funding deal have been leaked in the press in recent weeks but the government has refused to officially announce its support. The government wants the money to be used to help decarbonise the steel sector with the introduction of more electric arc furnaces powered by renewable energy to replace traditional coal-fired blast furnaces. Industrial Info is tracking the planned addition of an electric arc furnace at British Steel's Teesside beam mill. It is understood that the government funding would only cover 10% of the estimated costs of updating Tata's Port Talbot steelworks--which alone emits 2% of the U.K.'s CO2.
Tata already produces about 3.6 million tonnes of steel a year in the U.K. but in a recent report claimed that the country will need more than 10 million tonnes of steel over the coming years to become more energy self-sufficient. It estimated that more than 5 million tonnes of steel will be needed to build thousands of wind turbines at sea by 2030. Planned solar and nuclear power plants will need about 3.5 million tonnes of steel over the coming years while another 1.5 million tonnes of steel will be needed to build the infrastructure for hydrogen production and distribution as well as large-scale carbon capture (CCS) projects.
Henrik Adam, chairman of Tata Steel U.K., said: "Recent events have shown us just how crucial it is to have a secure energy supply. Achieving this will need an energy revolution in this country requiring millions of tonnes of steel to build new energy generation projects. A strong domestic and secure steel industry is also fundamental to delivering the U.K. Government's ambitious energy plans. But if British manufacturers are to supply the essential steel and continue to employ many thousands of people in this country, we need to invest and transform this strategically-important industry so it can make carbon-neutral steel. We need to learn the lessons from the U.K.'s energy supply which, as the Government says, 'drifted into dependence on foreign sources', undermining the country's energy independence. Similarly, our steel industry is at a crossroads -- if we do nothing, we risk it declining and drifting away to other countries. Down the other path is a new era in which we transform the steel production process to make it fit for the 21st Century."
Tata Steel, the U.K.'s largest steelmaker, failed in its efforts to get a £500 million (US$619 million) cash injection to combat the financial impact of the coronavirus pandemic. For additional information, see May 25, 2020, article - U.K. Steelmakers Need More Government Cash to Survive. Last October, Industrial Info reported that British Steel, the U.K.'s second-largest steelmaker, had requested £500 million (US$619 million) in financial aid from the government to help rescue the company. The company was originally rescued by China's Jingye Steel at the end of 2020 with a commitment to invest £1.2 billion (US$1.48 billion) to keep its key manufacturing sites at Teesside and Scunthorpe running. For additional information, see October 11, 2022, article - British Steel Seeks $570 Million Rescue Package and November 18, 2019, article - British Steel Saved By China's Jingye.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The future of the U.K's floundering steel sector is now hanging in the balance according to the country's largest union, UNITE, which recently stated that the sector was "a whisker away from collapse." According to the latest reports from Sky News, the U.K. business secretary, Grant Shapps, has told British Steel and India-owned Tata Steel that they have to guarantee a certain number of U.K. jobs until 2033 in order to unlock up to £300 million (US$372 million) each in government aid. British Steel employs about 4,000 people across U.K. operations, including its Scunthorpe steelmaking plant, while Tata employs 3,500 people at its Port Talbot steelworks in south Wales. Last month, Industrial Info reported on growing pressure on the U.K. government from its own ministers to save British Steel. For additional information, see January 9, 2023, article--Pressure Grows on U.K. Government to Save British Steel.
Details of the proposed funding deal have been leaked in the press in recent weeks but the government has refused to officially announce its support. The government wants the money to be used to help decarbonise the steel sector with the introduction of more electric arc furnaces powered by renewable energy to replace traditional coal-fired blast furnaces. Industrial Info is tracking the planned addition of an electric arc furnace at British Steel's Teesside beam mill. It is understood that the government funding would only cover 10% of the estimated costs of updating Tata's Port Talbot steelworks--which alone emits 2% of the U.K.'s CO2.
Tata already produces about 3.6 million tonnes of steel a year in the U.K. but in a recent report claimed that the country will need more than 10 million tonnes of steel over the coming years to become more energy self-sufficient. It estimated that more than 5 million tonnes of steel will be needed to build thousands of wind turbines at sea by 2030. Planned solar and nuclear power plants will need about 3.5 million tonnes of steel over the coming years while another 1.5 million tonnes of steel will be needed to build the infrastructure for hydrogen production and distribution as well as large-scale carbon capture (CCS) projects.
Henrik Adam, chairman of Tata Steel U.K., said: "Recent events have shown us just how crucial it is to have a secure energy supply. Achieving this will need an energy revolution in this country requiring millions of tonnes of steel to build new energy generation projects. A strong domestic and secure steel industry is also fundamental to delivering the U.K. Government's ambitious energy plans. But if British manufacturers are to supply the essential steel and continue to employ many thousands of people in this country, we need to invest and transform this strategically-important industry so it can make carbon-neutral steel. We need to learn the lessons from the U.K.'s energy supply which, as the Government says, 'drifted into dependence on foreign sources', undermining the country's energy independence. Similarly, our steel industry is at a crossroads -- if we do nothing, we risk it declining and drifting away to other countries. Down the other path is a new era in which we transform the steel production process to make it fit for the 21st Century."
Tata Steel, the U.K.'s largest steelmaker, failed in its efforts to get a £500 million (US$619 million) cash injection to combat the financial impact of the coronavirus pandemic. For additional information, see May 25, 2020, article - U.K. Steelmakers Need More Government Cash to Survive. Last October, Industrial Info reported that British Steel, the U.K.'s second-largest steelmaker, had requested £500 million (US$619 million) in financial aid from the government to help rescue the company. The company was originally rescued by China's Jingye Steel at the end of 2020 with a commitment to invest £1.2 billion (US$1.48 billion) to keep its key manufacturing sites at Teesside and Scunthorpe running. For additional information, see October 11, 2022, article - British Steel Seeks $570 Million Rescue Package and November 18, 2019, article - British Steel Saved By China's Jingye.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
