‘Hypocrisy’: Tata builds vast India furnace despite Port Talbot emissions claims

Photograph: Guy Smallman/Getty Images

The owner of the Port Talbot steelworks has been accused of “gross hypocrisy” as it prepares to open a new blast furnace in India, while citing a cut in carbon emissions for its decision to close two blast furnaces in south Wales, costing thousands of jobs.

Tata announced last week that up to 2,800 jobs would be cut under plans to close Port Talbot’s two huge blast furnaces and replace them with an electric arc furnace.

However, union bosses told the Guardian the decision was at odds with a project to build a huge new blast furnace at Tata’s Kalinganagar industrial complex in eastern India, which is entering its closing stages.

The job cuts have inflamed tensions between unions and the government, which steelworkers argue should have offered greater financial aid to the company to support domestic manufacturing. On Tuesday, workers gathered outside Westminster to protest against the decision, while Labour vowed to force a vote on the future of the British steel industry.

In announcing the redundancies last week, the company said that the overhaul would “secure most of Tata Steel UK’s existing product capability and maintain the country’s self-sufficiency in steelmaking, while also reducing Tata Steel UK’s CO₂ emissions by 5 million tonnes per year and overall UK country emissions by about 1.5%”.

However, the project at Kalinganagar could increase the company’s overall global emissions. It will be among the largest blast furnaces in the world, with a 5,870 cubic metre capacity, and is due to be completed this year.

Unions argue that building a new blast furnace while claiming an emissions cut in Wales represents double standards.

The Indian site already houses a vast blast furnace, with a capacity of 4,330 cubic metres, which the company has lauded as the “backbone of steelmaking” at the plant.

The Unite general secretary, Sharon Graham, said: “Tata’s actions in India expose the myth that its plan to close the blast furnaces in Port Talbot is due to concerns about climate change. It is nothing of the sort. Tata is simply seeking to boost its global profits.

“That’s why much-needed public investment in green steel should come with job guarantees and a plan for growth.”

The Welsh job cuts have been more than a decade in the making, as Britain’s steel industry has struggled to compete with cheaper Chinese imports and European rivals with lower energy costs. Long-running negotiations over government subsidies eventually resulted in Tata announcing a £1.25bn investment, including £500m from the taxpayer, to switch to an electric arc furnace, which uses electricity to melt scrap metal rather than burning coal and iron ore. But that will be far less labour intensive, resulting in 2,500 jobs being cut at Port Talbot and another 300 at another south Wales site, in Llanwern. Semi-finished steel slabs will be imported from sites in India and the Netherlands before the EAF is operational in 2027.

Charlotte Brumpton-Childs, a GMB national officer, said: “This gross hypocrisy is exactly what GMB has been talking about – Tata’s plan is centred on importing steel from their plants in India and IJmuiden while the electric arc furnace is built – and beyond.

“This transition being ‘green’ is a false flag, allowing foreign entities to profit off the back of GMB members and their communities.”

India has been far less proactive than Europe in tackling company emissions and its steel industry is reliant on coal.

Britain’s more stringent approach to tackling emissions, and the country’s abundance of scrap steel to feed EAFs, have set the two countries’ industries apart, sources said. The site has also been trialling carbon capture technology and the new blast furnace will have its own gas cleaning plant and a “robust dust extraction system”.

Tata has expanded Kalinganagar – a new town built up in the face of local tribal resistance and taking advantage of iron ore reserves in Tomka – to become one of the most important assets in its global portfolio.

In the early 2000s, a government agency began buying land from the public and courting international steel companies to open operations in coastal Odisha. The site, sandwiched between the crocodile-filled waters of the Bhitarkanika national park and the Tomka iron ore mountain, is one of four huge Tata steelworks in India (including its powerhouse Jamshedpur site).

Tata faced opposition from local villagers intent on receiving compensation and rehousing in return for their ancestral lands.

The situation came to a head in January 2006, when police opened fire on a group of tribal people protesting against the construction of a boundary wall of the plant on land grazed by cattle, with 13 Adivasi people and a policeman killed. A memorial is held each year.

A Tata Steel spokesperson said: “We understand how difficult this decision is for our workers and our steel communities … We believe that scrap-based steelmaking is the right solution for our business in the UK – a country which is currently the second largest exporter of used steel in the world, and one in which renewable energy is developing quickly.”