(March 30, 2011)

Manufacturing giant TATA Steel has said that it is keen to expand its production of steel for wind turbines. But at the same time it has maintained that new carbon taxes, designed to boost renewable energy schemes, would undermine its competitiveness.

The company, which employs 3,500 people in Port Talbot and 300 in Llanelli, was dealt a blow when chancellor Mr George Osborne announced a new minimum price for carbon emissions from power stations, to be implemented in 2013.

It has been claimed that the new Carbon Floor Price of GBP 16 per tonne from 2013, rising to GBP 30 a tonne by 2020 could add as much as GBP 20 million a year to TATA's energy bill by 2020.

However, the company has also talked about its pride in supplying steel for the global wind turbine makers, the sort of industry designed to benefit from the carbon tax, in a supplement for The Times. It added that "We also work with companies to develop innovative marine energy technologies."

Steel is used for wind turbine foundations, blades and bearings, among other things. The UK is likely to see a vast increase in offshore wind farms in the coming years. This sector was important to TATA Steel.

A spokesman of TATA said that "It is growing, and we do hope to capitalize on that. But if our international competitiveness is undermined, the people who make renewable energy infrastructure are going to buy their steel from abroad."

The UK is the first country anywhere to introduce a minimum price for carbon emissions, meaning TATA Steel is at a disadvantage to European rivals.

Also in 2013, the EU is introducing a new phase of its emissions trading scheme, meaning firms like TATA Steel will have to buy a large proportion of so called emissions allowances.

The company spokesman added that "The third phase of the EU scheme as currently proposed will deprive European steelmakers of a significant quantity of allowances they have received for free to date. The lack of this allowance is a loss only European steelmakers will face."

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