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The tasks of decarbonising the economy and securing supply chains do not come bigger than for the sprawling steel plant in Port Talbot in Wales.
For more than a century it has dominated the town as one of its largest and best-paying employers.
But the plant, one of the UK’s top carbon polluters, will need to find ways to make steel with less carbon dioxide output - eventually cutting it entirely in the race for net zero.
The challenge for loss-making parent Tata Steel UK is who will pay for improvements to achieve this. An inability to find the funds could put local jobs at risk.
John Warman, mayor of Neath Port Talbot, worked at the plant for 30 years alongside around a third of his class from school.
“It’s the backbone of the economy, and it has been for so many years,” the 77-year-old says.
Until recently, Tata Steel UK was booking losses of £1m a day, although insiders insist its finances have improved since March as global steel prices surge. Its Indian parent Tata, which also owns Jaguar Land Rover and Tetley Tea, also injected almost £1bn of equity in June.
Losses for the 12 months to March narrowed to £347m from £654m a year earlier, while sales dipped 7.8pc to £1.98bn.
In the bid to go green, Port Talbot was reported to be considering closing its two blast furnaces last year and replacing them with electric arc furnaces, potentially unlocking Government funding.
It would have turned the plant’s focus from making steel out of raw iron ore - something only Port Talbot and Scunthorpe’s plants can do in Britain - to scrap recycling.
But plans were shelved and discussions between the Government, Tata and the unions have slowed to a standstill.
Meanwhile, the cost of steel has shot up. In the last year, the metal’s price surged about 50pc for scrap and rebar, used in construction, according to London Metal Exchange data.
As it becomes more unaffordable, a large chunk of Britain’s self-sufficiency in building things, or the material that goes into them, is at stake.
“If it’s not made of steel, it is made using steel,” says Professor Cameron Pleydell-Pearce of Swansea University.
The plant, like many others looking to cut carbon output, does have a few options.
It can keep using gas-hungry blast furnaces and a process that uses coal to make steel, belching out carbon dioxide as a byproduct, before collecting and storing it underground.
This, however, has not been tested on such a large scale and was recently shunned by the industry, according Chris McDonald, chief executive of the Materials Processing Institute, a research centre part funded by the industry and government grants.
“I think it’s telling that the only major producer that was looking at carbon capture and storage for the blast furnace was the Tata Steel plant in the Netherlands,” he says. “They’ve just recently announced that they’re not going to continue with that as an option.”
Electric arc furnaces are another option, but Pleydell-Pearce says no company has been able to produce the full range of needed steel products using this method.
“That doesn’t mean that it’s impossible. It just means that it’s not happening right now,” he says.
Losing the capability to make high-quality products would have broad industrial consequences, he adds, with carmakers among the pickier customers needing quality steel just in time.
The industry appears to be leaning towards a newer technology using hydrogen to replace coal in the smelting process. Last month, truck maker Volvo took delivery of the first steel made using this process. Developed by a group of Swedish steelmakers, called Hybrit, it uses electricity and hydrogen made from electrolysis.
But the problem is the price. Decarbonising UK steel could cost £6bn, with rough estimates for Port Talbot weighing in at about £2bn to £3bn.
And, as the steelmaker struggles to get Government funding, its international counterparts will likely look at help available abroad and question why they should invest in the UK.
In September, ArcelorMittal said the Belgian government would pay half of its €1.1bn investment to clean up its plant in Gent.
“The support of both the national and the Flanders governments in this project is crucial given the significant cost associated with the transition to carbon-neutral steelmaking,” the Luxembourg-based firm said at the time.
Tata and union insiders are careful not to express a technology preference so as not to take options off the table, but in some way Government help and guidance is needed.
Whitehall points to its £315m industrial energy transformation fund unveiled in 2018, its £250m clean steel fund announced in 2019 and a £1bn carbon capture and storage infrastructure fund as examples of its commitment to green energy that companies can access.
A government spokesman said: “We recognise the critical role the steel industry plays in all areas of the UK and in our economy and are working closely with the sector, including Tata Steel, to support the transition to a low-carbon future in a way that supports competitiveness, jobs and clean growth.
“We are determined to secure a competitive future for the UK steel industry and in recent years have provided it with extensive support, including more than £600m to help with the costs of energy and to protect jobs.”
But the industry hopes it will further open the coffers, with “the clock’s ticking at Port Talbot,” McDonald says.
Within the next 10 years, one of its two blast furnaces will need replacing, offering the opportunity to simultaneously implement a new system - giving time for new skills to be learned.
Warman argues the site is permanently adapting and modernising, meaning the workforce is unlikely to fear another change, so long as it means jobs are kept.
Closure would have “a tremendous impact,” he says. “I never want to see those days. I think I speak for everybody on that.”
Meanwhile, the industry argues it at least needs a level playing field as European rivals enjoy cheaper energy, particularly as gas prices spike. Industry group Make UK estimated earlier this year that British steelmakers pay £54m more in electricity than German competitors.
Such a high energy cost makes the UK unattractive for pots of potential international investment.
“Pretty much every country in the world finds some way to subsidise its steel industry,” says McDonald. “The reason to do it is because it’s just impossible to have a modern industrial economy without steel.
“I think that’s why uniquely the British Steel Industry has been nationalised and privatised twice, because it sits on the border between private and public industry.
As steelmakers mull their options, they are faced with the reality that each may bring job losses as new technology means more machines.
Industry unions, keen to avoid job losses, point to the potential for expansion, with more than half of steel used in the UK imported, which also expends much carbon. Better to make more locally and gain high-wage jobs, they argue.
“Decarbonisation means we need to grow our steel industry, not shrink it, and with the right strategy there can be a just transition that protects jobs and the future of all our businesses,” says Roy Rickhuss of steelworkers’ union Community.
“Steel jobs are high-quality jobs located in parts of the country the Prime Minister claims to champion, and we are waiting to find out if levelling up is more than just a slogan.”