Tata Steel UK, a major steel producer, has decided to transition to greener steelmaking, a move that is expected to impact its supply chain businesses and workers. The company employs approximately 8,000 people in the UK, with half of them based at its Port Talbot plant in Wales. The transition to green steelmaking, announced in January 2024, could potentially affect up to 2,800 employees, with around 2,500 roles expected to be impacted in the next 18 months.
Government Funding to Support Affected Businesses and Workers
In response to the potential job losses, the UK government has announced a £13.5 million funding package to support the affected supply chain businesses and workers. This funding is part of the government’s £80 million contribution to the Transition Board fund, with Tata Steel contributing an additional £20 million. The fund aims to support local businesses heavily reliant on Tata Steel, enabling them to pivot towards new markets and customers if necessary.
Over 50 businesses have pledged to support workers who may lose their jobs due to the transition. Welsh Secretary Jo Stevens MP, chair of the Tata Steel / Port Talbot Transition Board, emphasized the importance of local businesses in supporting the affected workers and communities.
The Road Ahead
The transition to green steelmaking is a significant step for Tata Steel UK. However, it has already led to job losses in the supply chain, particularly with the closure of the Morfa Coke Ovens and Blast Furnace 5 at the Port Talbot steelworks. Rajesh Nair, CEO of Tata Steel UK, highlighted the crucial role of the Transition Board in supporting the transformation to low-CO2 steelmaking and mitigating the impacts on their people, supply chain, and communities. The company’s path to a greener supply chain is expected to be a challenging yet necessary journey, with the potential to set a precedent for other industries. The impact of market shifts on employment and the financial strain on small suppliers are among the key issues to be addressed in the coming months.
