Tata won’t survive without green support from government, Ministry says

If the government does not help Tata Steel become more sustainable, the company will “no longer be viable in the long term” due to the amounts that the company would have to pay in European CO2 taxes. That is stated in a report from the external advisors to the Cabinet that will be released sometime in the coming weeks. There is already a passage about this in the list of possible financial setbacks that the Ministry of Economic Affairs has recorded for the Cabinet formation talks. These were made public on Monday as an appendix to the final report by formation leader Ronald Plasterk.

The government wants to make an agreement about making Tata Steel in IJmuiden more sustainable, just like with other major players in the industry. Specific plans and timelines can be countered by targeted financial government support if the parties reach an agreement on this. Last autumn, Minister Micky Adriaansens (Economic Affairs and Climate) appointed Hans Wijers and Frans Blom to look at Tata Steel’s sustainability plans and come up with alternatives. Their report will be released this quarter (by the end of March), according to the Ministry documents. That report will show that government support in the “customized agreements” is of vital importance for Tata Steel.

In the coming Cabinet period (2024-2028) and in the Cabinet period that follows, the government will have to allocate many millions to prevent “thousands of jobs from being lost.” The exact amounts have been blacked out. Part of the costs goes to health measures. In September last year, the National Institute for Public Health and the Environment (RIVM) published a report showing that the expected lifespan of locals is, on average, 2.5 months shorter due to Tata Steel’s emissions.

The Ministry does not rule out the need to provide additional loans to Tata Steel or to guarantee loans from other financiers. “The extent of this cannot yet be estimated.” A possible cost item is also the possible disadvantage compensation that must be paid to Tata Steel if parliament orders the factory to adhere to stricter standards.

Tata Steel previously said that transitioning to clean steel production will be challenging without financial support from the government.