Dutch govt pledges €2 bn backing for Tata Steel's green transition plan

Tata Steel Nederland signs non-binding pact with Dutch govt for up to €2 bn to cut emissions at IJmuiden, with plans for direct reduction and electric arc furnace transition

Tata Steel Ltd has signed a non-binding agreement with the Dutch government and the province of North Holland to accelerate the decarbonisation of its Netherlands unit and improve air quality around its IJmuiden site, securing potential state backing of up to €2 billion.

 

The Dutch government’s proposed €2 billion contribution, subject to a final “tailor-made” agreement, would be supplemented by about €300 million from the EU Innovation Fund. The balance would be financed through a mix of Tata Steel Nederland’s cash flows, project debt and support from Tata Steel, the company said in a statement.

 

The Joint Letter of Intent (JLoI), announced on Monday, sets out a framework for phasing out high-polluting blast furnaces and coke plants at Tata Steel Nederland and transitioning to lower-emission technologies. The plan includes installing a direct reduction plant (DRP) and electric arc furnace (EAF), which would initially run on natural gas before shifting to hydrogen and biomethane once commercially viable. 

   

If completed, the first phase could cut annual direct carbon dioxide (CO₂) emissions by 5.4 million tonnes from a current maximum of 12.6 million tonnes. The company also aims to raise scrap use in steelmaking to 30 per cent from 17 per cent in 2019.

 

“This is the first step in our journey towards a sustainable long-term future for Tata Steel Nederland,” Tata Steel Chief Executive Officer and Managing Director T.V. Narendran said in a statement. “There are still many regulatory, policy and financial issues to resolve before we can take a final investment decision.”

 

The final investment decision will rest with Tata Steel’s board. Both sides said negotiations will continue in good faith after Dutch elections and the formation of a new government. The unions have backed the project.