20 July 2023 at 14:00
Tata Steel has doubts about how the company will make ‘green steel’. Even a complete farewell to the plan to make climate-friendly steel with green hydrogen is on the table, according to internal minutes in the hands of NU.nl.
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Steel factory Tata Steel in IJmuiden is considering fundamentally overhauling its sustainability plans. The company may not want to make steel with hydrogen after all, but is also looking at other ways to go green. It is unclear what the exact consequences of such a different choice would be. The union and employees are very concerned.
The reconsideration is partly due to technical doubts about the route taken. Employees and trade union FNV are concerned about the consequences for employment if the existing plans are adjusted. The factory could possibly shrink considerably and make less high-quality products.
Tata Steel announced in May that it needed more time to flesh out its green steel plans, but it was unclear whether this was a fundamental rethink. A spokesperson confirms on Thursday that the company is reassessing which technology is used for sustainability.
It is uncertain whether a choice for a different climate plan will lead to a delay in the renovation of the factory and the closure of one of the coke gas factories, which causes a lot of inconvenience to local residents. “Our ambition for green steel, of course, remains unchanged,” the company said earlier.
Option without hydrogen
The most notable option being considered by Tata Steel’s management is to completely abandon the planned hydrogen-powered ironworks. There would then only be an electric furnace that can make steel from scrap. That would fit better in the circular economy, because all steel would come from recycled raw materials. But this choice limits what kind of products can ultimately roll out of the factory.
The plan is “not acceptable” to the Central Works Council (cor), according to the report of a meeting that the council had with the directors of Tata Steel Netherlands and the Indian parent company.
According to the council, scrapping the hydrogen plans will cost “a lot of employment” and could even threaten the survival of the entire steel plant. FNV is also not pleased with the idea of leaving out the hydrogen-powered iron factory. “That would essentially mean scrapping the Green Steel route,” says Cihan Lacin of the union. “That is not an option for FNV.”
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Lower quality steel
A shrinkage of the greening plans is also on the table. There would then be only one hydrogen-powered ironworks instead of two. The number and type of electric ovens are also being reconsidered.
Earlier this year, Tata Steel asked local residents and other interested parties for feedback on plans to make steel with a lower carbon footprint. There were, among other things critical reactions on the choice of a new type of electric oven, which does not yet exist anywhere on an industrial scale. Critics doubt whether it is feasible to build three large ones in IJmuiden in a short period of time.
That is why Tata Steel is considering installing a so-called electric arc furnace. This has already been further developed, but the works council fears that the steel will then become of lower quality. Now Tata Steel still produces a lot of high-quality steel that is used in cars and packaging. “If more average products are made instead, the cor is concerned that we will not make it as a company,” the report says.
Chairman Cinta Groos of the Central Works Council says she is confident that the “very sensible” management of Tata Steel Netherlands will continue to opt for the hydrogen route. “Of course we are not the only ones who determine that,” she adds, referring to the Indian parent company. Tata Steel wants to make the sustainability choice this summer.
“It’s good to keep up the pace and keep the pressure on,” says Groos. The fall of the Rutte IV cabinet does not help. “The role of the government is of course fundamental in this.” A substantial government subsidy is required for greening, although the amount involved is still unclear.
Major consequences for climate policy
Tata Steel’s climate choice can have major consequences for the entire Dutch climate and energy policy. It is important for the climate goals that the largest CO2 emitter in the Netherlands quickly becomes more sustainable. Tata Steel is responsible for more than 7 percent of Dutch greenhouse gas emissions.
In its national energy plans, the government assumes that Tata Steel will need a lot of green hydrogen. That must be made with wind power from the North Sea. If Tata abandons the ‘hydrogen route’, this may have major consequences for the construction of wind farms and for future hydrogen producers.
It is not clear what the different sustainability options would mean for Tata Steel’s CO2 and environmental pollutant emissions. A spokesperson says that extra attention will be paid to the impact on the health of local residents in the further elaboration of the plans.
Binding agreement is delayed
Outgoing Minister Micky Adriaansens (Economic Affairs and Climate) hopes to make a binding climate agreement with Tata Steel as soon as possible. A first version of such an agreement was already signed last year, which still mentions large-scale use of green hydrogen. That agreement had to be worked out further. The final agreement should save 5 million tons of CO2 emissions by 2030.
FNV’s Lacin says he understands that Tata Steel wants to further elaborate the climate plans, as long as this leads to an “improved plan in terms of implementation, feasibility and, above all, speed”. “These things, in combination with at least job retention and the climate and environmental goals, are essential for us.”
2023-07-20 12:00:50
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