Tata Steel needs up to 2 billion for greening, secret figures show | Tata Steel

This became apparent on Thursday during the presentation of advice to outgoing Minister Micky Adriaansens of Economic Affairs and Climate. She had asked former minister Hans Wijers and consultant Frans Blom to advise on possible billions in support for Tata Steel.

These numbers are not mentioned in the public report they presented on Thursday. But the amounts were included in a presentation to the press. Until now, there has been great secrecy about the amount Tata Steel needs.

After it turned out that the figures had been projected by mistake, Wijers and Blom no longer wanted to show the sheet in question. NU.nl had already taken a photo of the figures.

In a response, Adriaansens says that the figures are “rough estimates”. Greening Tata Steel “is not going to happen at any price,” she further says.

The secret figures also show that the costs of remediation of the Tata site are estimated at 12 billion euros. These costs are “formally borne by the company”. But if Tata were to go bankrupt, they could also be at the expense of taxpayers, the report says.

The report also shows that Tata Steel can become more sustainable more quickly to limit the nuisance to the environment. But that costs the government more and may have negative consequences for Tata Steel’s competitive position. A “careful assessment” is therefore needed as to whether Tata should go green even faster than the company is already planning.

Adriaansens says she prefers the faster variant. She hopes to be able to submit a plan to the House of Representatives within a few weeks, which must approve before a subsidy can be given.

For the first time, the advisors also looked at the possibility of closing Tata Steel completely, or of waiving state aid to the steel giant. But according to Wijers and Blom, those options are unattractive.

Closure would mean that all nine thousand jobs will disappear and that CO2 emissions will probably move abroad. Moreover, it is unclear who would pay for the high costs of soil remediation on the gigantic Tata site, which has been used to make steel for a hundred years.

Refraining from state support would mean that it will remain unattractive for the Netherlands’ largest emitter to go green for many years to come, because ‘grey’ production is cheaper. As a result, the climate goals are not achieved and the already shaky social support for the steel factory continues to crumble.

Wijers and Blom studied various options for the greening of Tata Steel, including the company’s current plans. These will reduce emissions by 40 percent by 2030. The advisors also looked at an option in which the polluting coke gas plant 2 closes as early as 2026, and Tata covers its raw material fields three years earlier. Then fewer harmful substances would quickly blow into the environment.

That costs a lot of money, because Tata has to purchase coke abroad for several years. The advisory report does not mention an exact amount, but previous estimates ranged into hundreds of millions of euros. Permits must also be granted more quickly to implement the plans more quickly.

The acceleration creates greater risks during implementation, Wijers and Blom write. This is even more the case in a third scenario, in which Tata itself stops making iron. Instead, the company would purchase iron chunks and scrap to make steel in electric furnaces. This route is supported by environmental organizations such as Greenpeace.

But this plan is “economically unattractive”, the consultants write, because it produces lower quality steel. This worsens Tata Steel’s competitive position and the factory would need a lot of state support to stay afloat. Moreover, it is uncertain whether Tata will be able to purchase enough iron and the plan will result in the loss of half of the jobs at the steel factory.

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Wijers and Blom do not write which route the government should choose in the climate agreements with Tata Steel. But continuing the current plans or an acceleration comes out best in their comparison. In any case, the government must decide quickly and the plans must be implemented as quickly as possible, the advisors said.

According to them, it is also essential that the government provides cheap and abundant green energy in the coming years. The cost of electricity determines the price of the green steel that Tata Steel wants to make. If green electricity is much more expensive in the Netherlands than in other places in the world, Tata will be less able to compete on the global market.

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