Tata Steel has received a much awaited British government offer of support that could potentially decide the future of the company’s troubled steel making operation in the United Kingdom.

The company said it is studying the proposal and would consider it ‘‘carefully’’ before making any strategic decision on the future of Tata Steel UK.

The Financial Times and BBC reported the Rishi Sunak-government has offered £300 million to TSUK to decarbonise the company’s operations. The integrated plant at Port Talbot, Wales, uses coal in the blast furnace to produce steel, alone contributing to 2 per cent of UK’s overall carbon emissions.

“We have received communication from the UK government in relation to a framework for the continuity and decarbonisation of steel making in the UK. We are studying it and will consider it carefully prior to strategic decisions on the future of our UK business,” a company spokesperson said in the evening.

By at least one account, the package falls short of the demand Tata Steel has been making with successive governments. In the past, the company said the operation would have to close down without government support.

In an article with The Times earlier this month, Henrik Adam, chairman of TSUK wrote: “We understand the technologies, we have the ambition, we have the people, but we cannot do it alone. We need support from the government on the scale which is already being provided by our European neighbours to their steel producers, both in terms of direct investment and electricity market reform.”

A transition to carbon neutral operation is possible in two ways, clean hydrogen instead of coal or electric arc furnaces (EAF). The one which is being considered for Port Talbot is building EAF which will also help Britain to achieve its own commitment to reach net zero by 2050.

In the past, Tata Steel maintained it was unable to bear the full cost of the transition to green steel. The UK operation is structurally weakest within Tata Steel Group which also has basic steel making units in India and Netherlands.

A challenge to the EAF route of steel making also emanates from the high energy cost. UK steel producers face 60 per cent higher cost than their European competitors.

Adam’s article also pointed out how strategic it would be for the UK to nurture and sustain indigenous steel making given the supply chain disruption seen in recent years. The Port Talbot operation, producing about 3.6mt of steel, is also a large employer, having close to 9,000 people on the rolls.

The UK media reported the green steel switch package also includes support to Scunthorpe-based British Steel, which was sold off by the Tatas for a token £1 in 2016 to Greybull Capital which subsequently sold it to Chinese firm Jingye in 2020.

Tata Motors ADS

Tata Motors on Monday said the voluntary delisting of its American Depositary Shares (ADS), representing ordinary shares, from the New York Stock Exchange will become effective close of trading on January 23.

After Monday, there will be no over-the-counter market trading of ADS in the US due to regulatory restrictions under Indian law, Tata Motors said in a filing, reports PTI.

“The above action has no impact on the current listing status or trading of the company’s equity shares on the BSE and the NSE in India,” it noted.