Labor union, left-wing parties want state aid to help Tata Steel sustainability efforts
Trade union FNV and opposition party GroenLinks-PvdA are working on a letter urging the government to provide State Aid for Tata Steel’s sustainability transition before it is too late, NOS reports. The steel factory in IJmuiden must push billions into reducing its emissions, while also struggling with evaporating profit margins due to cheap steel from China and high energy costs.
The government already acknowledged that it would need to help Tata Steel with its transition to cleaner steel, but negotiations on conditions are not getting anywhere. FNV chairman Tuur Elzinga fears that this dithering will lead to the loss of tens of thousands of jobs at the company and the industries around it. “It is about the future of the manufacturing industry in the Netherlands. Something really needs to be done now. Otherwise, we risk losing valuable jobs.”
Tata Steel is struggling financially. The company suffered a loss of 556 million euros. It already announced a reorganization that will cut around 600 jobs and will have to cut another 60 million euros somewhere in the coming months. The Dutch steel factory is facing the same problems as ThyssenKrupp in Germany and ArcelorMittal in Belgium, France, and Germany. Cheap steel from China is pricing them out of the market while high energy prices and wage costs are driving up expenses.
At the same time, Tata Steel is negotiating with the government about State Aid for its partial switch from coal to green hydrogen. The aid would involve billions of euros. The negotiations have been dragging on for months and GroenLinks-PvdA is losing patience.
“I think the government should now take a step forward. We want to reduce the CO2 pollution, we want to keep those jobs, but we also want to retain the possibility of producing steel in the Netherlands,” GL-PvdA MP Joris Thijssen said, according to the broadcaster.
Tata Steel is also under time pressure to become more sustainable. From 2030, the emission rights in the European emission system ETS will become too expensive and no longer be available in sufficient quantities for the steel factory to continue as is. Tata Steel is also receiving regular fines from the environmental service for violating environmental regulations and putting the health of residents in the IJmond region at risk.
The government’s goal is green steel in IJmuiden to achieve climate goals and retain a basic industry in the Netherlands. But researchers recently argued that there is no future for green steel in the Netherlands. According to researchers Boris Schellekens and Rodrigo Fernandez of the Centre for Research on Multinational Corporations (SOMO), the steel industry would be better off moving to countries with a surplus of sustainable electricity and hydrogen, like Spain and countries in Scandinavia.
