The report shows that there is no ‘optimal route’ for making Tata Steel more sustainable. Closing the factory will result in health benefits for local residents, but also major job losses. There is again no social support for the option ‘do nothing and continue on this path’. In short, it is up to politics.
Hurry
Outgoing Minister Micky Adriaansens (Economic Affairs) and State Secretary Vivianne Heijnen (Infrastructure) appear to prefer ‘route 3’ from the report: the sustainability plan as Tata submitted at the end of November, which can then hopefully be implemented more quickly.
“It is very important to me that people in that environment can sleep peacefully and that the children can play outside. And the fact that this is currently causing so much concern is not good,” Adriaansens responds to the report. “Whether or not Tata will succeed will depend on the coming months. Who will pay for what?” There is still a lot to be done, she warns against too much optimism.
Government subsidy required
The decision also had to be made quickly, the authors write. Uncertainty about the future of Tata Steel leads to unrest among the company and local residents. Moreover, the 2030 climate goals – including a significant CO2 reduction – are breathing down the neck of the (new) cabinet.
The Ministry of Economic Affairs is conducting intensive discussions with Tata Steel to reach a tailor-made agreement about making the factory more sustainable. Steel is still made using polluting coal. The company wants to make ‘green’ steel by 2030, using hydrogen, among other things. That is an ambition that the company has been expressing for years, but which cannot be achieved without government subsidy.
As mentioned, Tata submitted a sustainability plan for this in November last year. In it, the company pleads for government support: billions are involved in greening steel production. The government should contribute 0.5 to 2 billion euros of this, it became clear during Wijers and Blom’s presentation.
“There is quite a lot of uncertainty,” says Weijers. “When will hydrogen become available? How quickly can you build offshore wind farms? How quickly will CO2 costs rise in the European market,” he outlines some issues. “You have a factory that continues to operate, and you have to build a new factory next to it. That causes many complications.”
Different interests
Wijers and Blom investigated alternative scenarios for this plan for the minister, taking into account, among other things, the economic importance of the company for the Netherlands, the climate goals and local residents.
Tata Steel is one of the largest polluters in the Netherlands and this has major negative consequences for the health of people living in the vicinity of the company. The company can and must contribute to achieving the climate goals and the government wants to make agreements about this.
The report weighs various scenarios, ranging from no intervention to complete closure. But ultimately, a middle path in which sustainability is achieved – possibly at an accelerated pace – seems to work out best in most areas. According to the advisors, this will ‘result in the desired reduction in CO2 emissions and local nuisance by 2030.’
Not an optimal scenario
However, none of the scenarios is optimal for all stakeholders, the consultants acknowledge. Because that depends on whose interests are more important.
Optimal or not, the outgoing cabinet wants to further investigate the option of accelerated sustainability. This will reduce Tata’s nuisance more quickly. However, this route does result in an additional demand for support from the steel factory, ranging from 10 to 50 percent of the previously mentioned 0.5-2 billion.
Without sustainability there is no Tata
Sustainability, under certain conditions, maintains the economic benefits, while the negative effects decrease. It is also important for the viability of Tata Steel, as was previously announced, because regular production methods are no longer profitable in the long term due to the high emission allowances that have to be redeemed in Europe.
The health of local residents must be given a central place in sustainability, Wijers and Blom further state. They see it as necessary for the survival of the factory that Tata Steel emits far fewer polluting and pathogenic substances in the short term.
‘Tata needs to take better care of himself’
Residents of Tata Steel are divided about the future of the steel factory. “Close it, underground, get rid of it,” a resident told RTL Z. “I don’t believe in a sustainable Tata Steel. We shouldn’t invest billions in that.”
Others are more nuanced. “Closing it is going too far for me, but they have to be more careful. Make sure they keep their mess with them. If I make a mess, I have to clean it up myself.”
And a third: “Tata offers a lot of work to the people in the region and technical innovations are being made. In that respect, the factory is important.” He sees the switch to green steel happening. “But I doubt it will happen on the agreed date.”
Tags: Cabinet Tata sustainable accelerated pace costing billions
