Tata Steel gets Dutch backing for €2 billion green transition
Tata Steel Netherlands has secured €2 billion in funding from the Dutch government to transition to low-carbon steel production. This follows a £500 million grant from the UK for a similar project, as the company aims to reduce carbon emissions significantly at its IJmuiden plant.
Tata Steel Netherlands (TSN) has secured up to €2 billion in funding support from the Dutch government, marking a major step in the steelmaker’s plan to transition operations towards low-carbon and sustainable steel production.
The Indian steelmaker signed a non-binding agreement with the government of Netherlands to transition to low-carbon steelmaking and cleaner operations at the IJmuiden plant. Both parties will keep working on the final tailor-made agreement in the coming months, including after the Dutch elections and the formation of the new government.
“There are a lot of issues to resolve and work to be done before us," said T.V. Narendran, chief executive officer of Tata Steel. “We would like to thank Minister Hermans, her colleagues in the Cabinet and the team from the Netherlands Government and from the province of North-Holland who have engaged constructively and painstakingly with us over the last 2 years to complete this first step in our journey towards creating a sustainable long-term future for Tata Steel Nederland," Narendran said in a company statement late Monday.
After grant
The latest support follows the £500 million grant provided by the UK government in 2024 for its £1.25 billion green steel project in the UK's Port Talbot. Tata Steel came to own both Port Talbot in the UK and the IJmuiden plant in the Netherlands as part of its 2007 acquisition of Corus Steel in Europe.
TSN has also applied for about €0.3 billion from the EU Innovation Fund. Some of the funding for the green transition will also come from its own cash flows, project debt, and support from parent company Tata Steel.
“Tata’s plans for decarbonization have the Parliament’s blessings. Company continues to engage with Government in Hague," Kotak analysts Sumangal Nevatia, Siddharth Mehrotra and Keshav Kumar wrote in a note dated 31 July. “US exposure is ~10% of TSN (Tata Steel Netherlands) sales (~0.7 mn tons) and is highly profitable. The company has negotiated with few customers on higher pass throughs due to tariffs, while discussions are ongoing with others."
Tata Steel first voiced its need for government support for the green steel transition four years ago, and has engaged in ongoing discussions with the Netherlands since then. Earlier this month, Narendran skipped the India Steel Conclave to travel to the Netherlands for another round of talks.
Set to decommission
TSN will decommission its blast furnace 7 and Coke and Gas plant 2, and construct a Direct Reduced Iron Plant (DRP) and an Electric Arc Furnace (EAF), initially using natural gas and more scrap. This will reduce carbon emissions by 5.4 million tonnes from the current maximum of 12.6 million tonnes.
Blast furnaces are large units that use the heat from coke to convert iron ore into purified molten metal for further processing into steel. EAFs do this process using electricity without any coke, thus cutting emissions.
The steelmaker has not yet completed the full engineering of the integrated project, and therefore, has not finalized the total spend.
“We are also closely monitoring the policy developments in EU on CBAM and in the Dutch Parliament regarding the challenges of the 2030 CO2 reduction targets," Narendran said.
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