Tata Steel has been pushing for hundreds of millions of pounds of taxpayers’ money from the government’s Project Birch fund to convert Port Talbot from blast furnaces to electric-arc furnaces, which are powered by electricity rather than coal. In return, ministers have been offered a stake in the plant.
The future of the steel industry — in particular Britain’s ability to make molten iron and steel from iron ore and coal — hinges on those talks.
If arc furnaces are installed then we lose that ability to make virgin steel. Thus obviating the argument for subsidy.