A £1.25 billion investment in electric arc furnace steelmaking is announced by Tata Steel and the UK government.

In addition to strengthening the UK's steel security, the project will be the first significant step towards the decarbonization of the regional steel sector.

The UK government and India's Tata Steel have jointly announced plans to invest £1.25 billion in an electric arc furnace steelmaking project at the Port Talbot site in Britain.

A £500 million grant from the UK government will be included in the investment.

According to IANS, the project will reduce direct emissions by 50 million tonnes over a ten-year period, making it the first significant step towards decarbonizing the local steel industry in addition to strengthening the UK's steel security.

The agreement with the UK government, according to Tata Group Chairman N. Chandrasekaran, is a turning point for the country's steel sector and industrial value chain.

"The project would leverage strategically available scrap steel that is domestically available and promote local value addition within the UK, all while maintaining a high degree of circularity," he stated.

The proposal and the transition period, which could involve a significant restructuring of the carbon-intensive and unsustainable iron and steel-making facilities at Port Talbot, where many of the current "heavy end" assets, like blast furnaces and coke ovens, are nearing the end of their useful lives, will be the subject of consultations soon, according to Chandrasekaran of Tata Steel UK.

As part of the proposed project, Tata Steel's balance sheet would also be reorganised, possibly eliminating the company's current cash losses from its operations in the UK and non-cash impairment of its legacy investments.