Tata Steel has announced it will be dismantling its two coking coal fired blast furnaces at the Port Talbot plant and replacing them with electric arc furnaces. Unfortunately, the electric arc furnaces can only work on scrap steel and cannot produce steel from iron ore. It will also cause the loss of up to 3000 workers. The word on the street is that this is to reduce its CO₂ emissions and meet Net Zero targets.

On Sunday 28 January 2024 Kemi Badenoch, the Secretary of State for Business and Trade, was interviewed by Camilla Tominey on GB News and was asked whether this form of producing steel from iron ore was being sacrificed on the altar of Net Zero.

According to Kemi Badenoch. This was all about saving jobs, that Tata Steel was losing £150m a day because it couldn’t compete with the cheap steel flooding the market from China. She said Tata steel was responsible for 10,000 people employed locally and going over to electric arc furnaces would limit the losses to 3,000.

According to Wiki. On 30 March 2016 Tata Steel threatened to pull out of steel making in the UK due to imports of cheaper Chinese steel, high energy costs, and weak demand. It put withdrawal on hold due to the Brexit referendum result of Leaving the EU.

According to the BBC. Tata Steel in Port Talbot is capable of producing 5 million tonnes of steel per year. (1 tonne is 1000kg, equivalent to 0.98 tons). That the plant had lost £160m in the last three months, (which is £1.7m a day, not £150m a day). Losing the two blast furnaces will cause the loss of 2800 employees and many times that in the supply chain.

They also stated that the Port Talbot site was the largest single emitter of CO₂ in the UK and removing the blast furnaces would reduce the CO₂ emissions in Wales by 20% (1/5th) and in the UK by 1.5% (1/66th). Tata Steel was committed to meet its Net Zero target by 2045 by building Carbon Capture and Storage and by the use of Green Hydrogen Fuel.

According to the Guardian. Tata employs 4000 workers at the Port Talbot site and 2800 will be made redundant in the next 18 months. It will cost £1,200,000,000 (£1b) to construct the new electric arc furnaces and will take 4 years to complete. We will then be the only G20 country without the ability to make steel form iron ore.

The Future for Port Talbot. Let us suppose that Tata will make 2800 workers redundant and there are three times that number in the supply chain. That is 11,200 people employed from the town and surrounding area all using local infrastructure and spending their earnings in the town. So, it isn’t just about the immediate commercial supply chain for Tata Steel it’s also the economic life blood of the local economy.

We hear constantly about how the use of renewables and its attendant infrastructure is creating thousands of new jobs. That is a lie, and the truth is we need to be using a new expression, Green Unemployment. There is also no such thing as economic Green Hydrogen Fuel.

Consider the Effect on the Economy. If the average wage for the 11,200 people employed in Tata and its supply chain is £30,000 a year, they each contribute £5,500 in Tax and NI which is a total of £61m a year contribution to the Treasury. Tata Steel is the largest employer in the area and staffed by workers ranging from at least 18 to 67 the vast majority of those made redundant will never work again.

So, if they all end up on Universal Credit, that is a cost to the Treasury of £291m a year. Total loss to the economy is £61m + £291m = £352m a year as well as the loss of being self-sufficient in steel production from iron ore. If the Treasury is going to lose £352m a year because of closing just the Port Talbot plant and the loss of making steel from iron-ore, they should subsidise Tata to keep the plant open.

The electric arc furnaces cost four times as much to run as furnaces burning coking coal. And the coking coal would be even cheaper if the climate tariffs added onto it were removed. The use of electric arc furnaces is much less economic than ones using coking coal so that is going to make the steel cost much more. This will dramatically increase the daily loss to Tata Steel and bring about a rapid total closure of the plant.

Where is the £1.6b coming from to build the electric arc furnaces and to install carbon capture and storage over the next 5 years, in order to meet its Net Zero target by 2045?

Also, we need to consider that 60% of the generated electricity used to fuel the arc furnaces will be from fossil fuels. So, the new electric arc furnaces are not zero emissions of CO₂ but are just transferring its generation to the electricity producers.

Likewise, if and when Tata Steel pulls out completely from UK, all our steel production needs will come from China where they will be producing CO₂ using blast furnaces.

That is not reducing the human emissions of CO₂ it is just geography.

This is all a result of the Climate Change Act of 2007.  Labour ending coal mining and coal burning, resulting in the knock-on effect of increasing costs of iron and steel production.

Visit any of the towns in Nottinghamshire and South Yorkshire and take a look at once thriving towns, now shabby and with half the shops in the high streets closed and boarded up. Go to the shipyards of the northeast and in Scotland and find wastelands.

The UK Independence Party urges the government to stop the Net Zero nonsense, revoke the 2007 Climate Change Act and subsequent acts preventing the building of new coal fired power stations. To start mining our own coal again and creating our own coking coal for the blast furnaces and make steel production cost effective again in the UK. This will create many thousands of fossil fuel jobs in South Wales, Nottinghamshire and South Yorkshire creating revenue for the Treasury.

Antony Nailer

UK Independence Party Spokesman for Energy, Environment, Transport and Treasury