Announced on Friday 19 January, the Indian conglomerate plans to cut around 2,800 jobs, with 2,500 of them slated for its Port Talbot site. Port Talbot is the largest steelworks in the country, currently employing 4,000 workers out of Tata Steel's 8,000-strong UK workforce.
The announcement comes as a result of Tata Steel’s wider net zero plans which will see its current blast furnaces at Port Talbot replaced with an electric arc furnace, which will be more environmentally friendly, but will require fewer human workers.
The first wave of job losses is expected to hit in April this year, with more set to follow in September.
The decision follows a meeting between Tata executives and the Community, GMB and Unite unions in London on Thursday 18 January. The unions proposed an alternative way forward: to keep one of the blast furnaces open alongside the new electric arc furnace, for a transitional period to help reduce the number of job losses significantly and protect the UK’s capacity to produce new steel.
However, this was rejected by the company, which deemed the proposal not “feasible or affordable”.
Environmental impact
The adoption of EAF technology at Port Talbot signals a move away from producing new steel using raw materials extracted from the ground. Instead, the focus will be on melting down scrap metal, a process powered by electricity sourced from renewable energy, such as wind and solar power.
Although some coal will still be required, the company is setting its sights on achieving net zero by 2024, with plans to explore alternatives such as carbon capture and green hydrogen fuel.
The Port Talbot site currently stands as the UK’s largest single emitter of CO2. The chemical process in traditional steelmaking, which relies on coal, contributes significantly to CO2 emissions.
By embracing EAF technology, Tata Steel anticipates an 85 percent reduction in carbon emissions, aiming to cut the UK's overall CO2 output by approximately 1.5 percent.
However, according to the BBC, this fails to take into account the carbon emitted from importing goods from abroad.
Community’s General Secretary Roy Rickhuss claims that the move will simply mean that “carbon emissions” will be “offshored to heavy polluting countries” instead, lessening the environmental benefits of the transition.
Human cost
Port Talbot is heavily dependent on Tata Steel, with the workforce currently constituting 12 percent of the town's entire population. In 2020-21, the site contributed three percent of Wales’s total economic output and offered salaries that were 36 percent higher than the UK average.
The UK Government has cited its commitment of £500 million to support Tata Steel's £1.25 billion plan as evidence of its dedication to sustainable steel production. This assertion was called into question by Labour’s Shadow Business Minister, Jonathan Reynolds, however, who argued that this strategy amounted to "£500 million for 3,000 job losses".
Tata Steel, justifying its decision, cited the plant's current loss of £1 million per day. The company expressed its intent to seek voluntary redundancies where possible and allocate £130 million to fund severance payments, community programs, skills training, and job-seeking initiatives.
However, critics say this is not enough, with Luke Fletcher MS and Sioned Williams MS, urging the Government to “step in to make sure that those who face job losses get support urgently”. In a joint letter, the two Welsh politicians warned that the decision would have a “devastating impact” on both the local communities and the national economy.
This sentiment was echoed by the trade unions who had attempted to negotiate with the steel giant. "Large-scale job losses would be a crushing blow to Port Talbot and UK manufacturing in general," said GMB boss Charlotte Brumpton-Childs.
“It doesn’t have to be this way – unions provided a realistic, costed alternative that would rule out all compulsory redundancies. This plan appears to have fallen on deaf ears and now steelworkers and their families will suffer."
Implications for UK manufacturing
TV Narendran, Tata Steel’s Global Chief Executive and Managing Director, touted the plan as the largest capital expenditure in UK steel production in over a decade, emphasising its ability to transform the Port Talbot sit “one of Europe’s premier centres for green steelmaking”.
Nonetheless, critics have argued that relying exclusively on scrap steel would severely undermine the UK’s manufacturing ability and self-sufficiency. The transition to EAF technology, whilst having positive implications for the environment, would also leave the UK as the only G20 unable to make its own steel from scratch.
Stephen Kinnock, Labour MP for Aberavon, home of the Port Talbot steelworks, has urged Tata Steel and the UK Government to rethink their approach, saying that relying on “imported steel from countries whose governments won't always have Britain's best interests at heart” makes the UK vulnerable on the world stage.
"Steel is the beating heart of manufacturing and of our entire infrastructure and, of course, of our national security, Kinnock told Sky News. "Do we really want to be a country, given the dangerous and turbulent world in which we live, that isn't able to produce its own steel?”
Analysis
The announcement from Tata Steel emerges as part of the ongoing debate on the so-called “human cost” of transitioning to net zero. Back in September, for example, Prime Minister Rishi Sunak justified his decision to delay or weaken net zero commitments by claiming that it would alleviate the immediate financial burden on households.
But does it really have to be about man vs nature? About prioritising the current livelihoods of human employees over long-term environmental strategy – and vice versa? I would argue that it is not a case of “either/or” – either human workers get to keep their jobs, or we take proactive steps to reach our net zero goals. The two should – and can – work hand in hand.
Much of the criticism of Tata Steel’s decision predominantly lies not in the move towards more eco-friendly processes itself, but in the timing and handling of the transition. If Tata Steel had adopted the trade unions’ suggestion of a staggered transition, would this have helped to safeguard jobs or was this really unfeasible, as Tata Steel claims?
Alternatively, perhaps it is the case that the focus should have been not on cutting jobs, but on retraining the workforce to equip them with the necessary skills to pursue green jobs?
On BBC Radio 4’s Today programme, Energy Analyst Jess Ralston, from the Energy and Climate Intelligence Unit (ECIU), argued that the 3,000 job losses "is obviously devastating – but particularly devastating when you realise this didn't have to be the case".
One alternative suggested by Ralston was to replace the blast furnace with a hydrogen furnace, which would have allowed for a more sustainable method of creating virgin steel.
As we come ever closer to the looming 2050 net zero deadline, a long-term strategy which considers the interests of industry, workers, the environment, and the economy will be crucial if the UK is to navigate successfully the delicate balance between the immediate needs of the workforce and the imperative to achieve a sustainable, low-carbon future.