When it is commissioned from the end of 2027, the electric arc furnace (EAF) will reduce the site’s steelmaking carbon emissions by 90%, equivalent to 5 million tonnes of CO₂ a year.
Tenova will supply an EAF with an annual capacity of 3 million tonnes of steel – similar to the output of the site’s blast furnaces – by melting scrap steel sourced from the UK. The use of scrap will also significantly reduce the UK’s reliance on imported iron ore, strengthening the resilience of the UK’s manufacturing supply chains.
New ladle metallurgy furnaces, also supplied by Tenova, will then refine the molten steel to make more complex grades required by manufacturers in the UK and other countries.
Mr T V Narendran, CEO and MD of Tata Steel Limited, who joined the signing of the contract in Port Talbot following the project’s Board-level approval, 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-CO₂ 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 agreement has been made possible by the £1.25 billion joint investment by Tata Steel and the UK Government, with Tata Steel investing £750 million and the government up to £500 million.
UK 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.
“Our upcoming steel strategy will provide further certainty for the sector as we set out our plan for its long-term growth and viability, backed by up to £2.5 billion for steel.”
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.”
Detailed engineering is now ongoing, and other equipment orders will soon be placed separately for the Hot Strip Mill and Casters life extension, new Pickle Line, cranes, and for construction management and civil engineering.
Tata Steel has completed public consultation on the planning application and is working closely with the authorities to submit the application in November 2024, with a view to commencing large-scale site work around July 2025.
