Port Talbot to host $1.5 billion EAF facility as Tata shifts to low-carbon, scrap-based production model.
Tata Steel has announced that it will commence construction of its £1.2 billion ($1.5 billion) low-carbon steelmaking facility in Port Talbot, Wales, from July 2025, with production set to begin by 2027, according to the company’s latest annual report.
The move marks a major transformation in the company’s UK operations, shifting away from traditional blast furnaces to electric arc furnace (EAF) technology, which uses scrap metal instead of coal-based methods. The transition is a part of Tata’s broader strategy to decarbonise its global operations and align with net-zero goals.
The company confirmed it has received all key planning approvals for the new EAF facility, which is being backed by £500 million in UK government funding.
“We are now transitioning to decarbonised and state-of-the-art EAF-based steelmaking by FY2027-28,” said Tata Steel CEO & Managing Director T.V. Narendran and Executive Director & CFO Koushik Chatterjee in a joint statement. “This will create a greener and more sustainable future for our UK operations.”
The move marks a major transformation in the company’s UK operations, shifting away from traditional blast furnaces to electric arc furnace (EAF) technology, which uses scrap metal instead of coal-based methods.
End of an Era at Port Talbot
Tata Steel has already ceased primary steel production at Port Talbot, having shut down its ageing blast furnaces earlier this year. The site, once a major hub of British steelmaking, will now pivot to a downstream model, processing imported steel substrate from Tata’s plants in India, the Netherlands, and other international suppliers.
Until the new EAF is operational, UK customers will continue to be serviced from these overseas facilities.
This shift has not come without controversy. The shutdown of the traditional steelmaking units led to significant job losses, drawing criticism from labour unions and local MPs. Tata, however, has maintained that the transition is essential for long-term viability amid tightening carbon regulations and rising energy costs.
Major Cost Rationalisation Underway
Alongside the green transformation, Tata Steel is undertaking a wide-ranging cost-cutting programme aimed at reducing fixed costs in the UK from £762 million in FY2024-25 to £540 million next year.
Cost savings will be achieved through a combination of substrate optimisation, IT modernisation, operational streamlining, and the elimination of corporate overheads, the company said.
The company aims to become leaner and more efficient during the interim period while the Port Talbot upgrade progresses.
A Greener Future with Scrap-Based Steel
Tata’s EAF technology will rely on locally sourced scrap, significantly reducing the carbon footprint of its UK steel production. Unlike traditional blast furnaces that use coal and iron ore, EAFs consume electricity to melt scrap metal, producing steel with substantially lower emissions.
The project aligns with the UK government’s industrial decarbonisation targets and is part of its broader push to modernise the nation’s manufacturing sector without compromising on environmental goals.
Once complete, the Port Talbot EAF is expected to become one of the cornerstones of the UK’s low-carbon industrial strategy, potentially influencing other major players in the steel sector to follow suit.
The new facility is scheduled to be operational by FY2027-28, ushering in a new era for British steel. If successful, the Port Talbot transformation could serve as a model for balancing industrial legacy with climate commitments.
As global steelmakers face increasing pressure to clean up their supply chains, Tata’s investment in Port Talbot may prove both economically and environmentally strategic — positioning the company as a leader in the shift towards sustainable steel production in Europe.
