Tata Steel aims to commission UK electric arc furnace project by 2027

By 2027, the electric arc furnace is expected to be fully operational, with the capacity to produce 3.2 million tonnes of low-emission steel annually.

Homegrown Tata Steel is expecting to start the construction of its low-carbon EAF-based steel making project in the UK from July 2025 and commence operations by 2027, top company officials said.

The company has received necessary approvals for its USD 1.5 billion project at Port Talbot, Tata Steel CEO & MD T V Narendran, and ED & CFO Koushik Chatterjee said in the company's annual report for FY2024-25.

"We are now transitioning to decarbonised and state-of-the-art EAF-based steelmaking by FY2027-28, supported by 500 million pounds in the UK Government funding," the management said.

They said that planning approval has been received for the EAF (electric arc furnace) project at Port Talbot and the construction is expected to commence in July 2025.

The company's upstream operations in the UK have been shut down and Tata Steel is using substrate from India and Netherlands operations to service existing customers in the UK.

"We have exited from steelmaking through the end-of-life heavy end assets in Port Talbot, and moved to a downstream model using imported substrate from India, the Netherlands and other external sources," an official said.

Speaking further on the UK plan, the officials said the structural transition is also accompanied by a significant focus on cost rationalisation as the company plans to bring down its fixed costs further from 762 million pounds in FY25 to 540 million pounds in the coming year.

Tata Steel Chairman N Chandrasekaran "company is on track on its transition to low-emission steelmaking. The decommissioning of two blast furnaces at Port Talbot, has cleared the way for the next-generation Electric Arc Furnace (EAF) project, supported by the UK government".

The reductions are based on optimising substrate costs, modernising IT infrastructure, rationalising downstream operations and eliminating corporate overheads.

As part of its efforts to reduce carbon emissions, the company is transitioning from the blast furnace route to the low-emission electric arc furnace process, which will utilise the locally available scrap.

By 2027, the EAF is expected to be fully operational, with the capacity to produce 3.2 million tonnes of low-emission steel annually.

The EAF-based steelmaking project is expected to reduce over 50 million tonnes of Co2 in the next decade.