The Welsh Government has backed union calls for Tata Steel to explore other options to decarbonise Port Talbot steelworks, after the Indian-owned company struck a funding deal with the 海角视频 Government to replace its existing blast furnaces with electric arc furnaces.
The Cardiff Bay administration also confirmed that it wouldn’t be providing any capital expenditure towards the decarbonisation of the plant, but it will invest in reskilling Tata’s workforce. Economy Minister Vaughan Gething said more than one technology should be considered to decarbonise Port Talbot, including hydrogen.
Last month, a £1.2bn funding package to help Port Talbot transition to an electric arc furnace operation, in a move that puts 3,000 jobs at risk, was announced by the steelmaker and the Westminster government, with the latter agreeing to provide £500m. Tata employs around 4,000 directly in Port Talbot and 8,000 in total in the 海角视频 with its downstream businesses, which in Wales include operations at Trostre and Shotton.
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Mr Gething said: “The Welsh Government’s view has been that we should maintain more than one technology option. We’ve always been clear that we want hydrogen to be a part of the future - that requires the 海角视频 Government to be prepared to invest in it as well for it to be a real option. You’ll see that happening in the Netherlands, where it’s a possible option for the future. It also depends on the lifetime for the blast furnace assets as well. Now, this is part of a negotiation that is taking place between trade unions and the company.”
He also condemned the fact that the Welsh Government had been excluded from the discussions between Westminster and Tata Steel regarding the Port Talbot plant.
“Kemi Badenoch’s approach to date has been to exclude the Welsh Government in a way that doesn’t serve the best interest of the company or the families that rely on it. I’ve been promised a conversation with Michael Gove and I look forward to that happening, but it does require different parts of the 海角视频 Government to be aligned in the same direction and to see the Welsh Government as partners, not competitors in this big strategic choice.”
The two blast furnaces at Port Talbot previously had investment to extend their production lives. Blast furnace 4 had its life extended by 20 years to 2032. Blast furnace 5 will expire in 2026, following investment in 2018.
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The deal has been strongly condemned by unions. Community Union general secretary Roy Rickhuss CBE called it a “bad deal” adding that the union did not support switching to the electric arc furnace model and that “better alternatives are out there”.
Mr Rickhuss said: “An electric arc furnace-only model is an attempt to do decarbonisation on the cheap and it shows. Only this Government could spend £500m to make our steel industry less competitive, our economy weaker, and potentially remove 3,000 jobs from areas that need them the most. The steelworkers of Port Talbot know this is a bad deal and better alternatives are out there.”
However, one expert argued that there are still unresolved issues in using hydrogen supply chains and hydrogen reduction plants to make steel.
Speaking earlier this year about the various methods to decarbonise steelworks, Professor Cameron Pleydell-Pearce said: “There is an issue with hydrogen reduction as an alternative in terms of scale. It is definitely possible to do it for individual plants and limited amounts of material but if you’re looking at offsetting all the iron ore production from blast furnaces to hydrogen, there’s huge issues in the hydrogen supply chain that I believe remain somewhat unresolved.”
The productive capacity of hydrogen reduction plants is also unknown, he said. The HYBRIT Project in Sweden, which aims to replace coking coal, traditionally needed for ore-based steelmaking, with fossil-free electricity and hydrogen, has already produced some steel via this method but in very limited quantities.
“The idea that we are going to scale that up and replace a blast furnace in a very short period of time is interesting when you consider that we don’t know the productive capacity of those reactors and the scale of infrastructure that is going to be required to generate the hydrogen in the first place,” he said.
Pleydell-Pearce also pointed out just how difficult it is to replace the blast furnaces with a low-carbon steelmaking alternative technology.
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“I’m not a fan of the blast furnace, but it is by far the most advanced, carefully balanced, and efficient materials-processing method that humankind has ever created,” he said. “[These new technologies are] competing against something that is incredibly good.”
“A blast furnace is not a backwards technology. It is a high-tech, high-production capacity, low cost method of materials production. If they weren’t that good we wouldn’t be using two billion tonnes of steel every year and the price of steel would consequently be much much higher.”
It comes as the chief executive of India-headquartered Tata Steel, T.V. Narendran, said the firm aims to complete the decarbonisation journey at Port Talbot in the next three years.
The chief executive said this would take 36 months but this is subject to required planning permissions needed ahead of the installation of the electric arc furnaces at the plant as well as the time taken for the furnaces to be delivered and installed themselves.
Speaking to the press in India, Mr Narendran said: “Consultation process with the unions is ongoing. We also need a number of (other) permissions. Some of the infrastructure needs to be upgraded. There is a lot of work that needs to be done. It has already started. We are hoping that in the next three years we should complete the entire journey.”
He made the remarks in response to a question about the timeline for the company’s decarbonisation plan and added that the company is engaged with some European suppliers to source the new plant machinery.
“It will largely be from European suppliers because, technically, most of the capital equipment suppliers are either in Europe or in Japan or Korea but this will largely be from Europe,” he said.
He said the deal is a milestone funding that we will get (from the 海角视频 government). The rest will come partly from internal resources as well as through borrowing.
“There are no plans to increase the capacity of the plant,” he added.