Wales’ emissions fall after Port Talbot steelworks changes

Port Talbot closure drives Wales emissions down 8.6% in 2024

Wales recorded an 8.6% drop in total carbon emissions during 2024 compared to the previous year. The reduction stems primarily from Tata Steel’s closure of coal-fired blast furnaces at Port Talbot steelworks in south Wales. For more than a century, the site has been the UK’s single largest source of carbon dioxide emissions.

The closure represents a significant shift in how the UK produces steel. However, it also highlights the difficult balance between environmental targets and industrial employment. Understanding what happened at Port Talbot matters for any business navigating the transition to lower-carbon operations.

Port Talbot steelworks accounted for roughly 2% of the UK’s total carbon dioxide output. In Wales specifically, the figure reached up to 20% of all emissions from the nation. Consequently, shutting down primary steelmaking at the site created an immediate and measurable impact on national emissions data.

Blast furnace closure ends primary steelmaking after 100 years

On 30 September 2024, blast furnace 4 at Port Talbot was permanently shut down. This closure ended over a century of primary steelmaking in the town. Tata Steel, the Indian-owned operator that acquired the site in 2007, is now transitioning to an electric arc furnace model.

The new electric arc furnace is designed to cut carbon dioxide emissions by up to 90% compared to the traditional blast furnace method. As a result, the site will shift from producing steel using coal and iron ore to recycling scrap steel using electricity. This change fundamentally alters the production process and the associated carbon footprint.

Tata Steel plans to open the electric arc furnace by the end of 2027. Both blast furnaces at Port Talbot are scheduled to close during 2024. Therefore, the site will experience a production gap between the closure of the old furnaces and the commissioning of the new facility. During this period, steel production at Port Talbot will cease entirely.

The shift to electric arc technology aligns with Tata Steel’s broader decarbonisation goals. The company aims to produce steel in a carbon dioxide-neutral way by 2050. In addition, it has committed to reducing emissions by 30% by 2030. Tata Steel also plans to achieve net zero by 2045 through the use of green hydrogen and carbon capture technologies.

Wales moves closer to net zero with 15% emissions reduction

The Port Talbot closure is projected to reduce Wales’s overall emissions by between 15% and 20%. This reduction is equivalent to the annual carbon output of nearly 2 million homes. For the UK as a whole, emissions could fall by approximately 1.5% as a direct consequence of the steelworks transition.

Wales has now achieved a 44% total reduction in emissions since 1990. Industry remains the largest emissions sector in Wales despite this progress. Nevertheless, the scale of the Port Talbot reduction demonstrates how a single industrial site can significantly influence national carbon accounts.

The closure directly supports Wales’s legally binding target of reaching net zero by 2050. Wales also has a statutory requirement to reduce carbon dioxide emissions by 63% by 2030 compared to 1990 levels. Therefore, the Port Talbot transition represents a substantial step towards meeting these commitments.

For businesses, this illustrates the growing pressure on high-emission sectors to decarbonise rapidly. Companies in manufacturing, processing, and heavy industry face similar expectations. Moreover, supply chains connected to these sectors will need to adapt as production methods change and facilities close or transform.

Economic impact includes 2,800 job losses and supply chain disruption

The transition comes with significant employment consequences. Approximately 2,800 jobs will be eliminated as a result of the blast furnace closures. Of these, around 2,500 are expected to be lost within the next 18 months. Furthermore, roughly 3,000 jobs across Tata Steel and the wider supply chain are considered at risk.

This scale of job loss creates immediate challenges for the local economy in Port Talbot and surrounding areas. The town has been economically dependent on steelmaking for generations. Consequently, the closure affects not only direct employees but also local businesses, contractors, and service providers.

The UK Government established an £80 million fund allocated to the Tata Steel Transition Board. This fund supports retraining programmes, business grants, and community assistance. By September 2025, the Transition Board had delivered measurable results across several areas.

Specifically, 3,667 training courses had been completed by affected workers and community members. In addition, 37 supply chain businesses received grants, which safeguarded approximately 200 jobs. The fund also supported the creation of 22 new firms in the region. These figures demonstrate active efforts to mitigate the economic impact, although they represent only a fraction of the total jobs at risk.

For businesses operating in regions dependent on heavy industry, the Port Talbot example highlights the importance of transition planning. Companies should consider how their own operations or supply chains might be affected by similar shifts. Moreover, firms tendering for public contracts may face increasing requirements to demonstrate how they support workers and communities during transitions to lower-carbon operations.

Steel production shifts from primary to secondary manufacturing

The change from blast furnaces to electric arc furnaces represents a fundamental shift in steel production methodology. Blast furnaces use iron ore and coking coal to produce primary steel. Electric arc furnaces, by contrast, melt scrap steel using electricity. This process requires significantly less energy and produces far fewer emissions.

However, electric arc furnaces cannot produce certain grades of steel that require virgin iron. As a result, the UK will become more dependent on imported primary steel for applications that cannot use recycled material. This has implications for supply chain resilience and the embodied carbon in construction and manufacturing projects.

Businesses that specify or purchase steel should review their supply chains in light of these changes. Projects requiring specific steel grades may need to source material from different suppliers or regions. Furthermore, the embodied carbon calculations for products and projects will shift as the UK steel sector transitions.

The Port Talbot closure also affects tender requirements for public sector contracts. Procurement Policy Note 06/21 requires suppliers to publish carbon reduction plans for contracts above certain thresholds. Consequently, businesses relying on UK-produced steel may need to update their carbon accounting and reduction commitments as the supply base changes.

Key facts on the Port Talbot transition

• Blast furnace 4 at Port Talbot closed permanently on 30 September 2024, ending over 100 years of primary steelmaking in the town.
• The site previously accounted for approximately 2% of UK carbon dioxide emissions and up to 20% of Wales’s total emissions.
• Wales recorded an 8.6% drop in overall emissions during 2024, largely due to the Port Talbot closure.
• The transition from blast furnaces to an electric arc furnace is expected to cut site emissions by up to 90%.
• Approximately 2,800 jobs will be eliminated, with around 3,000 positions across Tata Steel and supply chains at risk.
• The UK Government allocated £80 million to support retraining, business grants, and community aid through the Tata Steel Transition Board.
• The new electric arc furnace is scheduled to open by the end of 2027, creating a production gap of several years.
• Tata Steel aims to achieve net zero by 2045 and produce steel in a carbon dioxide-neutral way by 2050.

Carbon reporting and supply chain considerations for UK businesses

The Port Talbot transition demonstrates how rapidly industrial emissions can fall when major facilities close or transform. For businesses with carbon reduction targets, this highlights both opportunities and risks. On one hand, switching suppliers or production methods can deliver substantial emissions cuts. On the other, it may create supply chain disruption and cost increases.

Companies required to report Scope 3 emissions should review their supply chains for exposure to similar transitions. If your business purchases steel, cement, chemicals, or other high-carbon materials, you should understand where those materials are produced and what decarbonisation plans your suppliers have in place. Moreover, you should assess whether alternative suppliers or materials might be necessary if current sources close or transition.

For businesses tendering for public sector contracts, the Port Talbot example illustrates the importance of robust carbon reduction plans. Procurement Policy Note 06/21 requires suppliers to demonstrate how they will reduce emissions over the contract period. Therefore, understanding your supply chain’s emissions trajectory is essential for compliance and competitiveness. You can find support for carbon reporting and PPN 06/21 compliance through our net zero program, which helps businesses measure, report, and reduce their carbon footprint.

The job losses at Port Talbot also raise questions about social value in procurement. Public sector buyers increasingly require suppliers to demonstrate how they support fair work practices and community benefits. Consequently, businesses should consider how their own operations or supply chains address employment impacts during transitions to lower-carbon models.

Planning for industrial decarbonisation in your business

The Port Talbot closure provides a clear example of the scale and pace of change facing high-emission industries. For businesses in manufacturing, construction, logistics, and other carbon-intensive sectors, similar pressures are building. Planning ahead can help you manage risks and identify opportunities.

Start by understanding your current emissions baseline. This includes direct emissions from your operations (Scope 1), emissions from purchased energy (Scope 2), and emissions from your supply chain (Scope 3). Many businesses find that Scope 3 emissions represent the largest share of their total footprint. Therefore, supply chain engagement becomes critical for meaningful reductions. Our compliance services can help you establish accurate emissions reporting and identify reduction opportunities across all scopes.

Next, assess how changes in your supply chain might affect your operations. If key suppliers are likely to close, transition, or increase prices due to decarbonisation investments, you should identify alternative sources or materials. Similarly, if your customers are setting carbon reduction targets, you should understand what they will require from suppliers.

Consider what support might be available if your business faces disruption due to decarbonisation. The Tata Steel Transition Board demonstrates that government funding can be available for retraining, business support, and community assistance. However, accessing such support often requires early engagement with relevant authorities and clear demonstration of need.

Finally, review your procurement practices if you buy from high-carbon sectors. Understanding the emissions associated with purchased goods and services allows you to make informed decisions about suppliers and materials. Moreover, it helps you respond to customer requirements and tender criteria that increasingly emphasise carbon reduction. For businesses looking to embed sustainability into their purchasing decisions, our sustainable procurement support provides practical guidance on selecting lower-carbon suppliers and materials.

Further information on industrial emissions and steel sector transitions

For detailed information on Wales’s emissions data and climate targets, visit the Welsh Government’s climate change pages. The site provides annual emissions statistics, policy updates, and information on Wales’s path to net zero by 2050.

The UK Government’s hydrogen strategy outlines plans for green hydrogen production, which is expected to play a significant role in decarbonising heavy industry including steelmaking. This document explains how hydrogen could replace fossil fuels in industrial processes.

Information on the Tata Steel Transition Board and support available for affected workers and businesses is available through the Welsh Government’s dedicated transition support pages. These pages include details on retraining programmes, business grants, and community assistance.

For businesses needing to understand carbon reporting requirements and Procurement Policy Note 06/21, the Cabinet Office guidance provides comprehensive information on what is required for public sector tenders.