Tata Steel said the GBP1.25 project is expected to impact approximately 2,800 jobs, but would reduce Tata Steel UK’s CO₂ emissions by 5 million metric tons annually and lower the U.K.’s countrywide emissions by about 1.5%.

“The course we are putting forward is difficult, but we believe it is the right one. Having invested almost GBP5 billion in the U.K. business since 2007, we must transform at pace to build a sustainable business in the U.K. for the long-term,” said T V Narendran, Tata Steel’s chief executive officer and managing director.

“Our ambitious plan includes the largest capital expenditure in U.K. steel production in more than a decade, guaranteeing long-term, high-quality steel production in the U.K. and transforming the Port Talbot facility into one of Europe’s premier centers for green steelmaking,” he added.

Under the plan, the company will begin phasing out the blast furnace production by the middle of this year, idling one furnace and coke ovens in mid-2024 and winding down remaining hot end assets during the second half of the year. Tata also will undertake a wider restructuring of other locations and functions across the company, including closing the continuous annealing processing line (CAPL) in March 2025.

However, Tata said it will continue to operate the Port Talbot hot strip mill throughout the transition period and in future. Downstream and steel processing centers will continue to serve customers by utilizing imported semi-finished steel from Tata plants in the Netherlands and India as well as from other select strategic suppliers.

The company said it plans to commission the new EAFs in 2027.

The proposed investment is supported by the U.K. government, which has committed up to GBP500 million to enable the transformation. Tata Steel plans to invest GBP750 million in the project, alongside funding for a comprehensive support package for affected employees, business restructuring and transition costs as part of its long-term commitment to U.K. production.