From a unit who’s recorded £4 billion in losses, Tata Steel’s Port Talbot plant is now at the precipice of revival. While the company’s largest steel plant shut all furnaces last year, its plans to convert to “green steel” were approved by the local council on February 18 — and so, there seems to be a light at the end for the UK’s biggest employer and its workers.

According to a BBC report, the company is optimistic about a turnaround. It said that Port Talbot has lost them £4 billion since 2007 and the new furnace would create a “financially and environmentally sustainable” business.

Turnaround Possible for Tata Steel’s Port Talbot Plant?

Tata Steel said that its proposals for changes at its South Wales plant has received planning permission from the local Neath Port Talbot Council. In a statement on February 18, Tata said the planning committee has green lit its 1.25-billion-pound joint investment plan for “huge changes” at its biggest steel plant in the UK.

Business and Trade Secretary Jonathan Reynolds called it a “major step forward in securing a bright, long-term future for steel in South Wales”, adding that the plan will “provide security for Port Talbot’s green steel transition and help give Welsh steelmaking the certainty it needs to drive growth and attract investment”.

What Are Tata Steel’s Approved Plans for Port Talbot?

As per the proposal, the steel giant will close blast furnaces at the legacy plant and will instead switch to an electric arc furnace, according to a report by PA Media. While it is the greener option, this reduces the required number of workers at the plant — and almost 2,000 jobs will be cut.

Both the company and the UK government have promised to help fired workers find new jobs; and Tata in its statement said the shift to green instead of a complete shutdown means “thousands of jobs will be preserved”.

The statement further noted that Tata will receive £500 million of UK government funding to preserve 5,000 jobs across Tata Steel UK. It will also be used to reduce on-site CO2 emissions by 90 per cent compared to previous blast furnace-based steelmaking.

Green Steel by 2027-end?

Expressing pleasure at the council approval, Tata Steel UK CEO Rajesh Nair said the proposal looks to “build sustainable steelmaking in Port Talbot” and noted that the global market is challenging.

“… This is a significant milestone for the project and we are committed to begin large-scale work on site this summer, ahead of the Electric Arc Furnace starting up from the end of 2027. This £1.25 billion investment is the most significant investment made in the UK steel industry in decades. The facility will secure high-quality steel production, preserve thousands of jobs, and safeguard steel making in Port Talbot for generations to come,” Nair’s statement read.

Notably, the choice of switching to an electric arc furnace is strategic as the contraption uses electricity to melt predominantly scrap steel — something of abundance in the UK, according to a PTI report. Other steelmaking raw materials such as iron ore and and coal would need to be imported, it added.

In October 2024, the company had already brought metals tech manufacturer Tenova onboard to supply the new furnace. In December 2024, JCB was contracted for supply of green steel; and in January 2025, Sir Robert McAlpine as the project’s mains works contractor, the report said.

Tata Steel’s Troubles at Port Talbot

Tata Steel’s Port Talbot plant houses ageing iron and steelmaking assets such as the harbour, coke ovens, sinter plant and blast furnaces. All these were closed last year, the PTI report added.

In February 2024, Tata Steel CEO and MD TV Narendran said, “We have tried very hard for the last 15 years to support this (UK) business. But I think we have reached a stage where continuing as we did, is no longer an option. It is a difficult situation for our employees. We fully empathize with that.” Then, in June 2024, Narendran told PTI that job loss of around 2,500 workers in their UK operations is “inevitable”.

Through 2024 Tata Steel completely shut down its Port Talbot blast furnaces after rejecting a trade union plan to keep them operational till 2032, saying that it was “unaffordable” given Port Talbot’s losses.

In Q2FY24, Port Talbot dragged Tata Steel UK’s business with a whopping ₹6,358 crore impairment charge due to the green shift. The company reported loss of ₹6,511 crore in the July-September quarter of FY23-24.

(With inputs from Agencies)