Tata Steel is set to begin construction on a state-of-the-art electric arc furnace (EAF) facility at Port Talbot, Wales, in July 2025, with production expected to start by 2027. The $1.5 billion project, backed by £500 million in funding from the UK government, marks a significant step towards low-carbon steel production for the company. The EAF facility will produce 3.2 million tonnes of low-emission steel annually and is expected to cut over 50 million tonnes of CO₂ emissions over the next decade.
The project is part of Tata Steel’s broader strategy to transition to decarbonized and sustainable steel production. The company has already decommissioned two ageing blast furnaces at Port Talbot and shifted to a downstream-focused model, using steel substrate sourced from its operations in India, the Netherlands, and other suppliers to serve its UK customers. The new EAF facility will utilize locally available scrap metal, further reinforcing the company’s move towards a more sustainable and circular production model.
Tata Steel is also aiming to reduce its fixed costs from £762 million in FY25 to £540 million in the following year through cost rationalization efforts, including optimization of input costs, streamlining of downstream operations, and IT modernization. The company’s chairman, N Chandrasekaran, stated that Tata Steel is firmly on track with its green transition, with the decommissioning of the blast furnaces at Port Talbot paving the way for the next-generation EAF project.
The construction of the EAF facility is a significant milestone for Tata Steel, marking a major shift towards low-carbon steel production and a more sustainable future. With the support of the UK government, the company is committed to reducing its environmental impact while maintaining its competitiveness in the global steel market. The project is expected to create a significant reduction in CO₂ emissions and contribute to a more circular and sustainable production model, aligning with the company’s goal of achieving a low-carbon future.