LONDON, UK: In a deal aimed at securing the future of the British steel industry, the United Kingdom (UK) government has allocated US$621 million to Tata Steel to enable it to decarbonize its facility in Wales.
However, the move could put some 3,000 jobs at risk at the country's largest steel plant.
The government has allocated a total funding package worth $1.54 billion to Indian-owned Tata, including a $928 million investment to pay for the switch from current coal-powered methods to lower-emission electric arc furnaces.
The new electric furnaces, which are less labor intensive, would cut the country's total carbon emissions by around 1.5 percent. Port Talbot is the biggest single carbon emitter.
Despite the UK's government's statement that this week's deal would help to safeguard 5,000 jobs, Tata Steel UK currently employs more than 8,000 people, raising the prospect of 3,000 redundancies.
"The deal was the right thing for Britain and the workforce overall. We are saving jobs that would have been lost; without this investment, we would probably have seen the end of steelmaking certainly in this part of the country," Business and Trade Minister Kemi Badenoch told reporters.
Tata Steel has previously warned that it could close the Port Talbot site without government assistance.
Industry leaders have also warned that the UK is falling behind the European Union, which also has incentive schemes and the U.S., which has benefited from the Inflation Reduction Act (IRA) subsidies.
The government said Tata Steel UK would now inform and consult with staff and unions.
However, trade union Unite criticized the move, accusing the UK government of not investing more in Port Talbot and failing to secure job guarantees with Tata.
Unite General Secretary Sharon Graham said, "Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel."