The Dutch government may offer as much as euro 3 billion to Tata Steel Nederland to decarbonise the company’s steel plant at Ijmuiden.
After an extensive debate, the Dutch Parliament has approved extending financial assistance to the company even as the quantum and the terms are still to be negotiated and finalised.
However, estimates from external consultants suggest that subsidies could be as much as euro 3 billion from the government itself.
At the end of April, the Dutch government had formally decided that it wanted to implement Tata Steel’s plans to become more sustainable. The company plans to reach complete CO₂ neutrality by 2045 in two phases. The first phase of the project is expected to be completed by 2030.
The 7 million tonne steel plant at Ijmuiden is one of the largest in Europe, employing about 9,200 people. The plant’s location on the North Sea allows it to be highly flexible for the green transition.
Last week, the Tata Steel management in India had shared the company’s plan for the Netherlands in an analyst meet post the fourth quarter of FY24 results.
The decarbonisation plan for the Netherlands business is going to be similar to the UK decarbonisation in terms of the technology choice of an electric arc furnace, the company had said.
The Netherlands unit will undertake decarbonisation in two phases with one blast furnace being replaced before 2030 and the other after that.
Given that Ijmuiden already has a pellet plant, it intends to use more of DRI (direct reduced iron) and less proportion of scrap, which is abundantly available in the UK.
In the UK, the Tory government led by Rishi Sunak has offered £500 million in grant to Tata Steel UK to decarbonise the 3 million-tonne steel plant at Port Talbot, Wales. The project calls for an estimated investment of £1.25 billion. However, the grant funding agreement is yet to be signed and in less than a month, the UK will head for general elections, which the Labour Party is tipped to win over the Tories.
In the Netherlands, Tata Steel is currently doing the basic engineering and it hopes to get a sense of the capex towards the end of the current year.
In an interview with this newspaper earlier this week, Tata Steel executive director and CFO Koushik Chatterjee said that in November 2023, Tata Steel submitted a plan to the Netherlands’s ministry of economic affairs to replace one of the BF with a DRI and an EAF.
“On March 28, on the basis of two independent advisory committees appointed by the government, the cabinet concluded that they will support it with certain other measures. The Parliament has allowed the government to negotiate with the company in May and the same has started with the idea to find the terms of support and arrive at a detailed framework in the next six months or so,” Chatterjee had said.
