Tata Steel signs contract for electric furnace at Port Talbot

TATA STEEL signed a contract with a technology partner on Friday (18) to build an electric arc furnace at its Port Talbot site in Wales.

The tie-up with Tenova is aimed at reducing the plant's carbon emissions by 90 per cent, equivalent to cutting five million tonnes ofcarbon dioxide each year, the company said.

The new furnace, expected to start operating by the end of 2027, will melt scrap steel sourced from within the UK. This shift will help reduce the country's reliance on imported iron ore, supporting UK manufacturing.

The furnace will have an annual capacity of three million tonnes, matching the current output of Port Talbot's blast furnaces.

According to a statement, Tenova will also provide equipment to refine steel for more complex products required by manufacturers.

T V Narendran, CEO and MD of Tata Steel, said, “This landmark agreement will enable us to transform our steelmaking site that will not only support the UK’s decarbonisation journey but also provide economic development opportunities for South Wales.

“Today marks an important milestone in making low-carbon dioxide steelmaking a reality in Port Talbot as well as reducing the UK’s carbon emissions and supporting our customers with their own carbon reduction targets.”

The latest deal follows a £1.25 billion investment, with Tata Steel contributing £750 million and the UK Government adding up to £500m. The project aligns with the UK's efforts to reduce carbon emissions and create economic opportunities in South Wales.

Business and trade secretary Jonathan Reynolds said, “This partnership follows in the footsteps of an improved deal between the government and Tata Steel, and is further proof of our commitment to a bright future for UK steelmaking.

“Technology like the furnaces made by Tenova is critical to decarbonising the industry, unlocking its potential to provide skilled jobs, and creating economic stability for future generations of steelworkers in South Wales."

Paolo Argenta, executive vice president for the Tenova upstream business unit, said, “We are working with Tata Steel UK at an unprecedented level of transparency and cooperation, and we are confident this will lead to a successful project implementation. Tenova's global collaboration with Tata Steel, including projects in other regions of the world, further reinforces our strong partnership.”

Meanwhile, Tata Steel has finished public consultations for its planning application and is coordinating with authorities to submit it next month, aiming to start large-scale work by July 2025.