The Welsh Government is not in a position to deliver the scale of co-investment needed to help Tata Steel decarbonise its steelmaking operations in the UK, Economy Minister Vaughan Gething has said.
Tata Steel is currently in talks with the UK Government regarding what financial aid can be agreed to help it decarbonise its steel operations in Port Talbot. One of Port Talbot’s biggest current challenges is the cost of decarbonisation, yet rising energy prices and uncertainty over UK Government financial aid have put the future of Tata’s UK plant into doubt.
The steelmaker has called on Westminster to provide £1.5bn to help it reduce its carbon emissions as part of a £3bn green investment strategy. So far, UK Government Ministers have offered £300m to help Tata Steel subsidise, upgrade, and decarbonise its operations.
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When asked what level of support the Welsh Government was ready to give to Tata Steel to help cut its carbon emissions in Port Talbot, Mr Gething refused to specify financial support but said any investment and policy decisions would need to be made at a UK Government level.
Speaking at a press conference, he said: “I don’t think it’ll help for me to start producing figures or to try to think off the top of my head about the amount of support over an undefined period of Tata, but we have provided support on skills in the past as we have done to a range of other companies.”
He said: “Steel is a strategic asset for the whole of the UK and you can’t have significant steel production within the UK without having a future steel production here in south Wales. The UK Government needs to make choices that are in the interests of all of us and the sort of greener future we want to have, where that steel will come from, and how it's actually provided and produced.
“We can't resolve industrial energy prices here but we know that's a key ask [by steel companies]. We can't resolve a carbon border adjustment mechanism that works with other economies, whether in the US or the European Union. That's for the UK Government to agree with partners as well. We aren't in a position to deliver the scale of co-investment that might be needed to deliver change in the way steel is produced.
“What we can do is what we've always done both with Tata and other significant employers, which is to look at where we can be positive, particularly around skills to help people to shift and to improve the jobs they do and, if the nature of their work is changing, how we can co-invest with a company in the skills of the workforce.
“Tata has always valued that as have other businesses. We stand ready to do the things that we can do in the areas that we're responsible for, as well as continuing to make the case for a healthy and positive future for the steel sector here in south Wales.”
On the UK Government’s response to Tata Steel request for financial aid, the Economy Minister said it was frustrating that there hadn’t been a conclusion to the long-running conversation around the future of the steel industry.
“The UK should not be the only G7 country in the world that does not have a significant steelmaking capability. That has direct consequences and must mean there's a future of steel production here in south Wales. That's such a significant chunk of steel production across the UK. These are jobs paying well above the average wage, jobs that could and should have a future in the greener economy that we talk about.
“Steel is an essential part of that [green economy], as well as in ongoing infrastructure projects, so I'm frustrated we haven't seen a conclusion. I do think we need to get to the point that I've mentioned about what co-investment looks like in moving to a greener production phase.”
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