Tata Steel Nederland

Tata Steel Netherlands
Quick Facts
Type	Public
sector	Industry/Iron and steel
Headquarters (Benelux Organization)	IJmuiden, Netherlands
Year of Origin	1918
Emissions (All Scopes)	12.6 Megatons of CO2 in IJmuiden (2020)
Total Revenue	USD$XXXX billion (2020)
Stock Exchange	Bijv. Tokio, Amsterdam
Key People	Hans van den Berg (CEO) and T.V. Narendran (Chairman)
Number of Employees	XXX
Subsidiaries	dochterbedrijf 1 dochterbedrijf 2

Tata Steel Netherlands, stylized as Tata Steel, is founded in 1918 as 'Koninklijke Nederlandse Hoogovens en Staalfabrieken NV´. In 1999 it merged with British Steel and continued under the name Corus. Since 2007 it is part op Tata Steel.

Company Structure

Board of Directors

Executive Board

Name	Function	Remuneration x1000 EUR
Hans van den Berg	Managing Director Tata Steel IJmuiden	XXX EUR
Co van Dort	CFO	XXX EUR
Tom Eussen	Managing Director Tata Steel Downstream Europe	XXX EUR

Supervisory Board

Supervisory Board

Name	Function	Remuneration x1000 EUR
T.V. Narendran	Chair/CEO and Managing Director Tata Steel Ltd	XXXX EUR
Marius Jonkhart	Member	XXXX EUR
Leni Boeren	Member	XXXX EUR
Hendrik Adam	Member/CEO Tata Steel Europe	XXXX EUR

Accountant

The independent external accountant of Tata Steel Netherlands is PwC.

Main Activities

Tata Steel is part of Tata Group, which was founded in 1868 by Jamsetji Tata in India. Tata Steel in India was established in 1907 and the first ingot of steel was made in 1912. Nowadays Tata Steel is one of the world’s most geographicallly diversified steel producers with operations in 26 countries worldwide.

In 1918 IJmuiden steelworks company (also known has Koninklijke Hoogovens) was founded. In 1999 Corus was formed through a merger of British Steel and Koninklijke Hoogovens. In 2007 Tata Steel acquired Corus. Tata Steel Europe is now one of the biggest steel producers in Europe.

Since 1 October 2022 Tata Steel Netherlands is no longer part of Tata Steel Europe and operates independently from Tata Steel UK. The Board of Directors of Tata Steel Netherlands is fully responsible for all activities of Tata Steel Netherlands, which are supervised by the Supervisory Board of Tata Steel Netherlands.

Tata Steel IJmuiden received the predicate Royal at the opening of the steel factory in IJmuiden. Although the company is officialy called Tata Steel IJmuiden, informally some people still call it Koninklijke Hoogovens.

In 2020 Tata Steel Netherlands (TSN IJmuiden, TSN Services, TSN Technology and TSN Tubes) received more than €30 million from the NOW 1 and around €45 million from NOW 2 government grants (COVID-19 related). TSN IJmuiden received 90% of the total amount. In 2021 Tata Steel Netherlands had to refund the entire NOW 2 grant, as it turned out that the turnover loss in 2020 was above the set threshold.

Government

Insert text: To what extent can the government influence company policy? (shareholder, licensing authority, client etc.) Has company received NOW support or royal status?

Paris Agreement to Today

Financial Results since 2015

This tabel is meant to indicate that the companies have plenty of money to make their company more sustainable. Clearly distinguish between Dutch data and international data.

Financial situation

Year	Revenue	Profit	Dividend
2015	XXX Billion EUR	XXX EUR	XXX EUR
2016	XXX Billion EUR	XXX EUR	XXX EUR
2017	XXX Billion EUR	XXX EUR	XXX EUR
2018	XXX Billion EUR	XXX EUR	XXX EUR
2019	661 Million EUR (NL)	XXX EUR	XXX EUR
2020	581 Million EUR (NL)	XXX EUR	0 EUR
2021	XXX Billion EUR	XXX EUR	0 EUR

Scandals and controversies

- Between 2008 - 2019 Tata Steel Netherlands made additional profits of EUR 663 million by trading their excess EU ETS rights.

- Tata Steel Netherlands is likely exempted from paying any ‘Opslag Duurzame Energie (ODE)’ taxes. ODE is an additional energy tax that companies pay based on their energy use. The extra collected tax money aims to prevent placing the financial burden of the energy transition on households. It is suspected that the largest polluter of The Netherlands does not contribute anything to this fund, while it is likely that it will claim large parts of it the coming years.

- Early 2021, Tata Steel Netherlands strongly opposed the phasing out of the Emission Trading System (ETS), which was point of discussion in the European Parlement in March 2021. The European Parlement was taking a position in the carbon border adjustment mechanism that the European Commission was proposing. The lobby was succesful as the passages concerning phasing out ETS were removed from the final resolution.

Environmental issues

- Almost 1100 local residents and 8 foundations are sueing Tata Steel IJmuiden. They accuse Tata Steel of knowingly emitting highly dangerous and carcinogenic substances.

- In december 2021, the Dutch National Institute for Public Health and the Environment concluded that certain emissions of Tata Steel, such as carcinogens and metal substances, cause dangerous health issues for children living in the vicinty of Tata Steel IJmuiden.

- On February 2nd 2022, the Dutch Public Prosecuter announced it will start a criminal investigation into Tata Steel IJmuiden and residual product processor Harsco Metals. It wants to investigate whether the companies have wittingly put dangerous substances into the soil, air or surface water, which potentially could result into danger to public health. The Public Prosecutor investigates, amongst other things, the role of managers in the companies.

Current Emissions

Tata Steel Netherlands (TSN) is one of the most carbon-efficient steel companies in the world in terms of blast furnaces, but at the same time it is the largest industrial emitter of CO2 in the Netherlands. On average, its CO2 emissions are around 12.6 Mton per year.

According to Tata Steel Europe’s own Annual Report, TSN's scope one emissions were around 4.5 Mton CO2 in 2020/2021 (including emissions from gaseous fuel and fuel for transport and business travel), 0.78 Mton scope 2 CO2 emissions (emissions from purchased electricity) and 0.01 Mton scope 3 emissions (fuel for off-site transport and business travels). It can be argued that this scope 3 reporting is too narrow, as it does not take into account the emissions associated with producing raw materials. This is a major flaw in the emission reporting of Tata Steel Netherlands, as it states in its Annual Report that it takes a holistic methodology including direct emissions plus indirect emissions associated with imported electricity (Scope 1 + Scope 2) and a holistic scope which also takes account of the emissions associated with producing raw materials (Scopes 1+2+3).

Total reported emissions by Tata Steel Netherlands (2020/2021)

Scope 1	Scope 2	Scope 3
4.5 Megatonnes of CO2 (2020)	0.78 Megatonnes of CO2 (2020)	0.01 Megatonnes of CO2 (2020)

Climate Policy and Plans

Current Policy

Based on the Dutch industry commitments in the National Climate Agreement, TSN has a mandatory CO2 reduction target of 30% by 2030. TSN announced its own CO2 reduction ambition of 40% by 2030 in an Expression of Principles with the Ministry of Economic Affairs and Climate Policy. It's ultimate goal is fully climate-neutral steel production. TSN is also currently investing € 300 million in the so called 'Roadmap Plus' plan to reduce other emissions in the short term.

On September 15, 2021, TSN announced that it would transition to the production of green steel through the hydrogen route using DRI technology. TSN made this decision together with labor union FNV, which had previously expressed its preference for this direction.

Climate Plans

At the beginning of 2021 Tata Steel Netherlands and the Ministry of Economic Affairs and Climate agreed in an ‘Expression of Principles’ (EoP) that Tata Steel should strive to reduce its CO2-emissions with 5 Mton in 2030.

In September 2021 Tata Steel Netherlands announced that it choose to implement the ‘Direct-to-DRI – route’ (Direct Reduced Iron) plan, which was proposed by labor union FNV. This plan proposes to transition to green steel by putting into use one DRI-plant by 2027 (combined with closing a blast furnace and a coke- and gasfactory) and a second DRI-plant between 2030 and 2040 (also combined with closing a blast furnace). At first the DRI-plant would run on natural gas, causing a reduction of 3.9 Mton CO2 with the installation of the first plant. After the installation of the second DRI-plant, CO2 emissions will be further reduced with another 5.5 Mton. Between 2027 and 2040 it is expected that hydrogen will be increasingly available for the plants to run on hydrogen instead of natural gas. Depending on the availability and market prices of hydrogen both DRI-plants will be able to run completly on hydrogen, which will, according to Tata Steel, result in zero CO2-emissions.

The first critical reflection on the Green steel plan of TSN is to note that the reduction 0f 3.9 Mton CO2 by 2030 would not be enough to reach its own target of a CO2 reduction of 7.6 Mton by 2030.

Moreover, it is important to remark that as long as the DRI-plants run on natural gas, there are still CO2-emissions (0.9 Mton per year per plant) that need to be captured to result in zero-emissions. Tata Steel would need to find an external facility that is able to transport and store it's CO2 emissions in order to produce green steel, as it does not have its own CCUS facility.

Furthermore, there are also many important conditions that need to be met in order to reach this ambition. As said before, Tata Steel's ambition to produce CO2-free steel by 2050 depends on a timely construction of a hydrogen backbone. Also, large amounts of sustainable generated energy is required to provide the energy for the electric furnaces and carbon capture systems, as long as the plants run on natural gas. This must be purchased externally, since the residual heat that Vattenfall used to provide sutainable energy for Tata Steel will disappear with the closing of the blast furnaces. Furthermore, delay of the transition to green steel is to be expected as it is dependend on a proces of granting permits by local and national government authorities, which must be accelerated to keep up with the above stated timeline. Lastly, it is to be expected that this route to green steel will have an unprofitable top, therefore requiring financial support in order to be realised.

Due Diligence

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Conclusion

Tata Steel strives to lower its CO2 emissions from 12.6 Mton to 7.6 Mton in 2030 and to 0 in 2050 by means of DRI (Direct Reduced Iron). It proposes to use green hydrogen in combination with electric furnaces to achieve this ambition. A feasibility study, conducted in September 2021, showed that achieving these goals depends heavily on a number of significant preconditions, such as financial support from the Dutch government, fast permit granting, adjustments in laws and regulation and the timely construction of hydrogen infrastructure.

With the above stated ambition Tata Steel will reduce its CO2 emissions by 40% before 2030, which is not in line with what is necessary to prevent global warming above 1.5 degrees. Moreover, the ambition depends heavily on very uncertain external processes. Lastly, Tata Steel Netherlands' CO2 reduction ambitions do not include the entire value chain, which also makes it unclear whether the company's operation will align with the 1.5 degrees pathway.