Decarbonisation offers the UK a chance to "neutralise uncompetitiveness" in its steel industry, Tata Steel Europe chief executive Henrik Adam told the Business, Energy and Industrial Strategy (BEIS) Committee inquiry into Liberty Steel today.
One of the difficulties of operating in the UK is the higher cost of doing business compared with other jurisdictions, Adam said. UK energy costs are almost double those of Germany, he said, adding that decarbonisation is a chance to level the playing field on energy costs, business rates and government procurement. Government support, in terms of investment into the new energy infrastructure, would be key, Adam said.
Tata Steel Europe has not yet decided on its own decarbonisation roadmap and is studying various technological alternatives.
The potential late-2030s timeline for large-scale hydrogen availability means Tata would use other technologies, such as electric arc furnaces (EAFs) or natural gas solutions, Adam suggested. Some have also said Port Talbot is well situated for carbon capture, utilisation and storage.
"Certainly EAFs are part of the potential solution, but it is too early to comment on what is the specific way we are proposing to decarbonise our business," he said.
Suggestions that the company could use EAFs at Port Talbot — mooted as part of its continuing talks with government — have met with resistance from trade unions given the potential reduction in headcount that this could entail. Adam told the BEIS committee that any change in asset configuration would open other opportunities for employment, such as in scrap handling or at direct reduced iron plants.
But there is an expectation among some senior Tata executives that the company needs to "right-size" its headcount in the UK, irrespective of the production configuration it decides upon.
While the sale of Tata's European IJmuiden business to Sweden's SSAB fell through, Adam reiterated that the firm would continue with the separation of its UK and continental European businesses. This would enable the sites to "follow different tracks" and "separate strategic decisions", he said.
The Trade Remedies Authority's decision to end safeguards on some products would create a misbalance with the EU, where all measures are being extended for three years, he added.
