Tata Steel seeks fresh UK government funding as Port Talbot green steel project faces delays

Tata Steel has approached the UK government for additional financial support as delays in its Port Talbot steel plant transformation raise project costs, according to a Sky News report. The company recently approached the Department for Business, Innovation, Science and Technology (DBIST) to discuss a fresh funding package.

The request comes after the UK government approved a £500 million grant in 2023 as part of Tata Steel’s £1.25 billion investment plan to construct an electric arc furnace (EAF) at the Port Talbot site in South Wales.

The new electric arc furnace was initially scheduled to begin operations by early 2028, around three years after construction began. However, delays in securing the required grid connection have pushed the expected commissioning timeline to late 2028 or early 2029. Tata Steel estimates that the delay, along with rising construction costs and lost sales opportunities during the transition period, could substantially increase the overall expense of the project.

The Port Talbot project is aimed at maintaining large-scale steel production in Britain while moving towards cleaner manufacturing methods, with the investment also intended to protect thousands of jobs across the UK. The transition has already resulted in job losses, with around 2,500 positions affected after the closure of the plant’s final blast furnace in 2024, marking the end of traditional blast-furnace steelmaking at the site.

Tata Steel has repeatedly raised concerns over the financial viability of its UK operations, citing competition from lower-priced imports. A senior company executive had earlier described Britain as “an unfairly priced dumping ground for cheap imports.” Trade unions have also highlighted concerns over import competition, including steel shipments from India, Vietnam and South Korea. Earlier this year, Tata Steel was reported to be considering mothballing its UK steel mills as losses increased.

It remains unclear how much additional funding Tata Steel is now seeking from the UK government, though industry sources suggest it is likely to run to hundreds of millions of pounds.