The UK Competition and Markets Authority’s Subsidy Advice Unit (SAU) has announced that it has written a report regarding the proposed £500 million funding for the decarbonization of the Port Talbot plant of Tata Steel UK, a subsidiary of Indian steel producer Tata Steel, following a request from the Department for Business and Trade (DBT). According to the assessment in the report, without the subsidy Tata Steel UK’s capital investment in electric arc furnace technology would not go ahead.
The assessment further explains that the lost production due to the closure of the existing blast furnaces at Tata Steel UK would be replaced by imported steel with high emissions. As a result, without the subsidy carbon emissions in the country would increase amid imported high-emission steel.
The SAU stated that the project will contribute to developing a more environmentally-sustainable method of steel production and achieve two objectives: mitigating carbon leakage, and decarbonization by reducing the UK’s carbon emissions.