Cabinet will soon make green deal with Tata Steel, but it could cost billions more

The outgoing Cabinet wants to make a quick agreement with Tata Steel about the clean-up plan that the steel manufacturer has submitted. It is being looked into whether it is achievable to carry out a portion of the plans sooner than intended, according to Minister of Economic Affairs Micky Adriaansens.

The Cabinet had asked former minister Hans Wijers and top consultant Frans Bloom to review the plan submitted by Tata Steel and examine alternatives. They concluded that the plan made by the steel manufacturer was the most logical option. They also stated that the government must contribute to the plan either way.

Tata Steel needs anywhere from 500 million to 2 billion euros in subsidies by 2030 to accomplish its clean-up plan, but could need anywhere from 50 million to 1 billion euros more if the company is to speed up its plan. The information was accidentally made public when former Cabinet minister Hans Wijers and consultant Frans Blom gave a presentation about their commissioned report, which they handed to Adriaansens.

The figures were inadvertently included in a slide, but they were not included in the public report. The cost to clean up the Tata Steel worksite was also estimated at up to 12 billion euros, which the company would pay unless they declared bankruptcy.

Adriaansens emphasized that these are “rough estimates” and the precise split of the costs will have to be firmly negotiated with the company. “Let it also be clear it will not be done for just any price,” she warned.

The minister has said that she does not have time to leave it for the next Cabinet to handle. “This is a very urgent problem. The people that live in the nearby area are asking us to do something about it daily.” She promised to keep the Tweede Kamer involved in the process. The Cabinet may reach agreements with the company this year.

In their second opinion, the two advisors did not name a preference for a variant. But Wijers called the Cabinet’s decision to continue with the tailor-made agreement with Tata Steel and the view to starting the plan sooner “a well-defendable and courageous decision.”

The advice to the Cabinet regarding possible financial assistance shows that a quick decision about this is important, said employers’ organization VNO-NCW. The business interest group said the new report is an “excellent starting point” for agreements between the government and the steel factory regarding the reduction of harmful emissions.

“It becomes clear that this will lead to new green investments, carbon reduction and decreased local nuisance and a cleaner environment,” VNO-NCW said about the report. There are several reasons it would be wise for the Cabinet to decide how to proceed with some urgency.

“For example, local residents need clarity, as does Tata itself, which must be able to invest in new production processes and factories. The environment, suppliers, knowledge partners and employees also need to know where they stand,” the organization said.