The Joint Letter of Intent is an agreement between Tata Steel Netherlands, its parent company Tata Steel Limited, the Dutch state, the province of North Holland, and contains commitments to reach a binding tailored agreement for the transition to greener, cleaner, and more circular steel production in the IJmond. The signing is an important interim step towards binding tailored agreements on greening and cleaning up the production process.
To make the production process more sustainable, the plan is for Tata Steel to replace one of the two coal-based plants with modern, cleaner installations that will run on natural gas. The plan also includes CCS (CO2 storage) and replacing natural gas with biomethane and/or green hydrogen. This leads to a reduction in emissions of approximately 5.4 million tons of CO2 per year; and can rise to approximately 7.2 million tons of CO2. This reduction is roughly equivalent to 5 percent of the total Dutch emissions.
With the new plant, a significant step is also taken in reducing the emissions of harmful substances, fine dust, nitrogen, and noise pollution, thereby significantly reducing health risks for local residents. For example, between 2027 and 2029, windbreaks and several coverings will be built at the raw material fields. This will reduce the main source of health risks, fine dust, by almost 35 percent in total. Additionally, lead emissions will be reduced by 68 percent and nitrogen by 44 percent.
Outgoing Minister Sophie Hermans (Climate and Green Growth): “The signing of this letter of intent is good news and a step in the right direction. The preservation of large companies like steel manufacturer Tata Steel is important. Because this way, we as the Netherlands can remain self-sufficient and become less dependent on foreign countries in this rapidly changing world. Therefore, our tailored approach is important. Heavy industry that is becoming more sustainable and considers the living environment has a future in the Netherlands.”
Outgoing State Secretary Thierry Aartsen (Public Transport and Environment): “With this signing, we are taking an important step towards a healthy, cleaner, and safer living environment for the people living near Tata. This brings concrete improvements for health and livability closer. I am pleased that we can provide them with more clarity about a healthier and cleaner future for Tata Steel with this step. We are reducing health risks for local residents while the company can continue to produce steel responsibly in the IJmond.”
The agreement between the Dutch state and Tata Steel is part of the tailored approach in which the national government supports companies in their sustainability efforts and reduction of their impact on the living environment. In recent months, Tata Steels plans have been assessed by experts for feasibility, and negotiations have been held regarding possible support from the state. The total investment amounts to between 4 - 6.5 billion euros. The state intends to contribute a maximum of 2 billion euros. Tata Steel is responsible for the remaining part of the investment. State support will only be provided after a final tailored agreement is reached.
The draft JLoI has been submitted for advice to the Advisory Committee on Tailored Agreements for Industrial Sustainability (AMVI). Due to the fact that the tailored agreement with Tata Steel is one integral agreement to improve health and reduce CO2, the Expert Group Health IJmond (the “Expert Group”) has been invited by the AMVI to jointly come to one integral advice. The advice of the AMVI and the Expert Group has been included in the Joint Letter of Intent. Discussions have also taken place with the European Commission regarding potential state aid.
A public consultation will start shortly based on the JLoI. The responses will be incorporated into the development of the binding tailored agreement in the coming period.
