The Dutch state is allocating a maximum of two billion euros for the greening of steel factory Tata Steel in the coming years. This is apparent from a draft agreement that the factory and government brought out on Monday, after years of secret consultation.
Tata Steel, now responsible for 7 percent of the Dutch CO2-Moet, has sustainability plans for emissions with more than 5 megaton co2 to be able to lower in 2030, slightly less than a half -year -old level of 12 megaton. Tata Steel must also make an effort to better protect the health of local residents. The factory has been under fire for years because of the harmful impact on the environment.
The plans that an appointment has now been made concern only the closing of one of the two polluting blast furnaces on the site. The other will only close well in the following decade. It is quite possible that the state and the factory have to go into a whole negotiation process again by that time. “There is still a lot of work for us,” said director of Tata Steel Hans van den Berg Monday.
The deal that is now does not mean that the money is just transferred. Closing the State aid deal has three steps, only at the latter is this final. The agreement that is now closed concerns the second step. Citizens and a special advisory committee can now comment, and the factory and State will further develop details. Then a definitive deal may follow.
Trust problems
The agreement that is now presenting nevertheless marks an important intermediate step in a controversial and difficult consultation that has been dragging on for years. There were great trust problems between Tata Steel and the State and much discussion about what was expected from each other, revealed NRC Earlier this year. In the meantime, there was a constant debate in society about whether a large polluting factory such as Tata Steel (around eight thousand employees) earns billions of state aid at all.
The total expected costs of the investment are between 4 and 6.5 billion euros, of which Tata is therefore expected to contribute 2 to 4.5 billion euros, in addition to the 2 billion of the state. With the total amount, the factory wants to build a completely new production process, where steel is made on the basis of natural gas instead of coal. The goal is still a major reduction in greenhouse emissions for 2030, but that planning is now quite tight after years of delay.
Tata Steel CEO TV Narendran also confirmed this on Monday after asking from NRC. According to him, 2030 is the ‘intention’ that the factory has. Originally, achieving this goal was a hard requirement for state aid.
Green hydrogen, once an important part of the plans, has disappeared into the background. This is still expensive and now seems to be replaced by biomethane – ‘green’ gas that can be made from manure or green waste, for example. It is striking that in the plans also the capture and storage of co2 is called. That approach seemed off the track for a long time, but is now on the table again.
The sustainability plans of Tata Steel have been known in recent years, but the extent to which the government wanted to contribute and whether it would come to a deal was uncertain. There is great division over the state aid. Volt made Tata Steel one of the main points of the election campaign. Various environmental organizations, including Stichting Urgenda, continued to criticize Tata Steel in recent years. According to them, they were unfeasible, and the factory could be better off.
Elections
It is precisely that Tata Steel and the Cabinet are taking a new step in making the industry more sustainable, it is not entirely coincidental with a view to the elections. The remaining coalition parties (VVD and BBB) can thus claim a modest success in the field of greening the Dutch economy, which is also difficult.
In the past year, outgoing minister Sophie Hermans (VVD) received the criticism that her climate plans were too little and that sustainability was too slow. After a call from the House of Representatives and from the industry, she also fell the National Co2-Tax on, a measure that co2-emission would make more expensive. Research by NRC showed that this CO2-Leave rather one of the obstacles to Tata Steel at the closing of a deal.
With the agreement with Tata Steel, the government hopes to give the almost stuck greening of the industry a pendulum. Originally the intention was to reach agreements with several large emotors, but almost nothing ended up. It is expected that the government will be able to make such agreements with smaller industrial companies.
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With the support, the Netherlands joins in a row of European countries where similar agreements have been made with steel producers, such as Germany. It has been found there that coming to a deal does not always mean that greening then also takes place. For example, ArcelorMittal received 1 billion euros from the German government for greening, but announced in June not to make use of it because a good “business case” was missing.
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