UK government is in advanced talks with the steel producer, Tata Steel, over a £500m package to secure its long-term future in the UK.
Under the deal, Tata Steel would also be required to commit to building electric arc furnaces to reduce carbon emissions. The production process, which is less labour-intensive than current blast furnaces, could result in the loss of thousands of jobs.
Whitehall officials have been in talks with Tata and British Steel for months about state support to help fund the transition to the more environmentally friendly production method.
It is said to have indicated that as many as 3,000 of Tata’s UK-based staff may lose their jobs in the long-term as a result of decarbonisation. But “a number” of the roles could be cut through workers taking early retirement.
In July last year, Tata Group’s chair, Natarajan Chandrasekaran, said a transition to a greener steel plant was “only possible with financial help from the government”.
