When it comes to Steel production Tata steel is a leading name in the industry. It is a market leader that has a lot of repute and provides employment to thousands of people around the world.
This was news in the making for quite some time. Conventional Steel plants are known to emit CO2 and are a major carbon emission culprits.
Tata Steel as part of its commitment towards a greener environment is striving to reduce carbon emission and the overall carbon footprint.
As part of this initiative It is shutting down its blast furnaces in Port Talbot, South Wales
This closure would mean 3000 Tata Steel employees would be losing their jobs.
This causes a great impact on the economy which is already under a lot of stress.
The company would be getting funding to the tune of 500 million pounds. Using this money they would be installing an electric arc furnace and using recycled scrap metal instead of coal as fuel for producing steel.
The current steel plant employs 8000 people however the new arc furnace powered plant would be able to do the job with a lesser number of employees as a result only 5000 employees would be retained.
The remaining 3000 employees would be laid off.
This would create a challenge for their livelihood.
As per the terms of the deal two blast furnaces coal and iron ore to make steel would be closed by the spring of 2024.
This would result in the loss of more than a third of the employees.
The company has justified this move as it was to improve the competitiveness as well as the profitability of the business.
This company action would also comply with the UK's target of net zero emission by 2050.
As per the unions this action would lead to compromise both the quality as well as quantity of the steel that would be produced by the plant.
This would also lead to the UK's dependence on steel imports and scrap metal.
The union feels that the company has gone back on its previous commitment to protect their jobs and pensions by investing in the blast furnaces.
A alternative plan has been proposed by these unions
As part of this plan is to retain both blast furnaces and to add an electric arc furnace. This would result in a blended model of steel making.
That would not only reduce emissions but also increase efficiency.
The workers union has sought the help of the government and its intervention in order to resolve the situation in such a way that jobs are not lost and the steel plant can be made viable to become sustainable.
The steel industry is vital for not just the national security but also for the industrial strategy of the country.
The local MP Stephan Kinnock has shown his dismay and disappointment at the plan of Tata steel.
He is of the opinion that this plan would be devastating for both the community as well as for the economy of Port Talbot and the whole of South Wales.
He is of the opinion that the company should listen to the Unions and reconsider the decision made by them as the blast furnaces are the "Beating Heart" of the steel works and the "life blood" of many sectors of the society.
This event unfolds at a time when the entire steel industry in Europe is faced with multiple challenges like the rising energy prices as well as global over capacity.
Cheap imports, trade disputes and the covid 19 Pandemic have also had an impact on the slowdown that the industry faces.
In addition the steel industry is facing the pressure to decarbonize and modernize their production processes because 7% of the global carbon emissions are due to the steel industry.
The UK government has a stand that it wants to support the steel sector and its workers so it has provided various forms of financial assistance as well as regulatory relief so that the industry can cope with both the challenge of the crisis as well as the transition.
Currently the Government is working both with the company as well as the Unions to reduce the impact of the job layoffs and also provide support to the affected workers as well as the local communities.
