State funding support essential for green push: Tata Steel’s Chatterjee

Tata Steel Netherlands (TSN) recently signed an agreement with the Dutch government for getting 2 billion euros in state support for the first phase of its plans to cut emissions at its IJmuiden plant. Koushik Chatterjee, executive director and chief financial officer (ED & CFO) of Tata Steel, tells Ishita Ayan Dutt in a video interview why state funding is key to the company’s low-carbon transition in the Netherlands and how fair-trade rules proposed by the European Union (EU) can shape its operations. Edited excerpts:

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What's next after signing the joint letter of intent (JLoI) with the Netherlands?

The engagement with the Netherlands government on the terms of the tailor-made agreement and policy conditions will be initiated after the formation of a new government.

The Dutch government has estimated a total investment of 4-6.5 billion euros for the project. Is this for the first phase and how long will the project take?

I will not comment on the capex or investment at this stage, as we are in the engineering phase, which will take some time to finalise, as we also prioritise, optimise, and sequence the investment plan. The scope of the current decarbonisation is one blast furnace transition to low-carbon steelmaking configuration, while the second blast furnace transition is at least a decade away.

Do the upcoming Dutch elections pose any risk to the agreement’s implementation?

The nonbinding JLoI marks the first milestone in a long, political and regulatory process where both parties have agreed on the landscape they want to work on, i.e. the aims and objectives. This is an integrated project with many sub-projects and the tailor-made agreement will have oversight from the Dutch parliament and the European Commission. In the coalition political landscape in the Netherlands, most parties are aware of the importance of steel sovereignty, and there is broad bipartisan support for this decarbonisation proposal.

How critical is government support for Tata Steel Netherlands’ long-term European strategy?