UK Government support for greening Port Talbot steelworks significantly lower than other European states

Luke James, Brussels

UK Government support for Port Talbot steelworks is significantly less than other European states are investing in green steel production, new European Commission figures show.

The UK Government has provided £500 million in state aid to Port Talbot owners Tata Steel as part of a plan which will see production decarbonised but at the expense of around 2,800 jobs.

When the deal was announced last September, Business and Trade Secretary Kemi Badenoch called it a “historic package of support”.

But the State Aid Scoreboard published on Tuesday by the Commission shows Germany and France have both spent more on greening their steel industries.

France

It shows that France provided steelmaker ArcelorMittal with €850 million (£730m) last year to decarbonise steel production at its site in Dunkirk.

The German government has also this year announced a €1.3 billion (£1.1bn) package  to support ArcelorMittal in the decarbonisation of two steelworks.

That follows a €2 billion (£1.7bn) support package announced in Germany last July for Thyssen Krupp’s decarbonisation project and €1 billion (£850m) state aid package to Salzgitter in October 2022.

“Industrial decarbonisation is key to reach Green Deal objectives while boosting competitiveness,” the Commission said of the figures.

Sustainable industrial jobs

ThyssenKrupp chairman Bernhard Osburg said the investment in his company’s project “secures sustainable industrial jobs not only here but also in related industries”, which would “demonstrate internationally that progress, prosperity and climate change mitigation are not mutually exclusive.”

The scale of the investment being made on the continent would be enough to make the difference at Port Talbot, according to unions representing steelworkers.

Unite said it would cost an extra £250 million to keep the blast furnace active at Port Talbot while the new electric arc furnaces were being constructed.

A plan to save 2,300 jobs drawn up by the GMB and Community unions said an extra £683 million is needed.

“That would be £683m to immediately protect more than 2,300 jobs for over a decade and provide time to develop an adequate solution to look after everyone impacted by the decarbonisation, while also protecting the integrity of our steel industry, and the heart of the economy and community of Port Talbot,” said a report commissioned by the unions.

Port Talbot would benefit from an additional £2.5 billion in funding for steelmaking if Labour wins the next general election, Shadow Wales Secretary Jo Stevens has said.

Secretary of State for Wales, David TC Davies, has said: “The UK Conservative government intervened in Port Talbot with one of the biggest support packages in the history of steelmaking to save as many jobs as possible. The plan has safeguarded Welsh steel for many generations to come.”