Tata Steel has signed a non-binding agreement with the Dutch government and North Holland province to speed up the decarbonization of its Tata Steel Nederland unit. The pact secures potential state funding of up to EUR 2 billion to support the transition, which is also set to receive about EUR 300 million from the EU Innovation Fund.

The Joint Letter of Intent involves setting out a framework to phase out high-polluting blast furnaces and coke plants at Tata Steel Nederland and transitioning to lower-emission technologies, as well as installing a direct reduction plant and electric arc furnace. These new units will initially use natural gas before shifting to hydrogen and biomethane.

This first phase could cut annual direct carbon dioxide emissions by 5.4 million tons from a current peak of 12.6 million tons.

T. V. Narendran, Tata Steel's CEO and Managing Director, said that regulatory, policy, and financial issues remain before a final investment decision is made.