Tata Steel and the Clean Industrial Deal: How will the EU Commission approach green transition?

Climate activists and politicians are abuzz with discussions about the Clean Industrial Deal, a new EU policy designed to accelerate the green transition of European industry while maintaining global competitiveness. Conceived as a follow-up to the Green Deal, this initiative aims to align climate goals with industrial growth — a delicate balancing act with profound implications for local communities. In the Dutch context, all eyes are on Tata Steel, Europe’s second largest steel producer that over the past year has been facing fines for pollution, calls for state aid, and competition from China. 

Studio Europa Maastricht discussed this with Brigitte van den Berg, a member of the European Parliament from the Dutch D66 party, who herself comes from the IJmond region of the Netherlands where Tata Steel’s site is located. The conversation followed the third episode of the Local Europe series, organized in partnership with Pakhuis de Zwijger and hosted on behalf of the Representation of the European Commission in the Netherlands. This event in Amsterdam focused on climate issues and the Clean Industrial Deal, which falls under the new portfolio of Dutch European Commissioner Wopke Hoekstra. 

Green and competitive

Mario Draghi’s recent report on the future of European competitiveness emphasized the need for the Clean Industrial Deal to be adopted within the first 100 days of the new European Commission. Van den Berg expressed agreement with this urgency, highlighting the importance of aligning climate ambitions with industrial competitiveness: 

“I very much agree with the urgency that Draghi indicated in his report. I think we see with the steel industry that they are really struggling with competition from China and the US, but also the high energy prices are endangering our industry at the moment. And with that we are also putting our climate goals at risk, because we really need to make a transition to green industry, and it needs to happen fast. The European Commission announced that they will come up with the first proposal for the Clean Industrial Deal by mid-February, and we have no time to lose.” 

Tata Steel’s case illustrates both local and European challenges. Van den Berg sees the Clean Industrial Deal as an opportunity to support Tata Steel’s sustainability goals while keeping its EU-branch competitive globally: 

“I feel closely connected to this case because I was a deputy mayor and was very locally involved with it, and for me it’s an example that comes to mind when I think about the broader European mission. First, we have some general measures, which are a protection against Chinese rivalry and also lowering energy prices. But at a larger scale in the long term, Europe needs to analyse where it wants to produce steel in the future—and I mean, of course, green steel. How much steel do we need in Europe, and where are we going to make it? As soon as we know that, we can help these places to make the transition,” she says.

“I think Tata Steel has a good position to be one of those places where we are going to make green steel in the future because of its strategic position at the coast, at the harbour, with access to electricity because of the windmills in the North Sea. It would make a logical location, but I think industries should make a plan on how they want to make the transition and present it to the European Commission,” she adds.  

Accountability above all

Van den Berg stressed the importance of balancing financial support for transitions with strict accountability to meet long-term sustainability goals: 

“I think at the moment the government is taking a very balanced approach. On the one hand, the province is saying that there is no excuse to not comply with the current emission limits for both CO2 and harmful substances, and they are ready to bring Tata Steel to court over it. They are very strict on that, and I support it because we need to hold Tata Steel accountable on behalf of the people who live close to its site. On the other hand, the national government has promised that the green transition will also create a healthier environment for the people living around the factory, and I think that is a very important hand-in-hand solution,” she explains.

“I think we see with the steel industry that they are really struggling with competition from China and the US, but also the high energy prices are endangering our industry at the moment. And with that we are also putting our climate goals at risk.”

“When it comes to state aid, there are multiple options. Some people are calling for nationalizing, but we at D66 proposed a plan to buy the right to use some of Tata’s land, because it will make it possible to invest in a harbour. This will support the energy transition by helping to install windmills at sea and develop all the electricity infrastructure that’s needed,” Van den Berg adds.

According to her, this approach will give the government a stronger position:

“On the one hand, they invest in the economy that’s always going to succeed because we need so much green energy that this is a no regret investment. On the other hand, it gives them a way to not directly subsidize a huge steel company but actually invest in something that also has a return. I think that would be a smarter solution.”

Yet, when it comes to Brussels, the industry has to prove its competitive potential to secure EU support, Van den Berg believes:

“I think the industries should present their plans to transition in the coming years and what they need for that. The industry that can present the most competitive but also the most inexpensive plan for the government should be the one that Europe goes with. So I think it’s really important that the industry shows their own willingness to seriously invest because in the end, they are the ones who will profit.” 

A better future for local communities

Van den Berg emphasized that EU policies like the Clean Industrial Deal can translate into tangible opportunities for local communities across Europe: 

“There are so many regions like IJmond in the EU. There are about 25 regions in Europe that have steel plants comparable to Tata Steel, but there are also so many other industries. What I think should happen is Europe really has to decide in which places in the future we will have industrial places based on the new energy sources. And in those regions, you have to invest in the green transition,” she explains.

“In other regions that have no industrial future, we should have a very strong Just Transition fund because it’s essential to invest in those regions and make sure that they get a new economic future—for example, by investing in clean tech or by making sure that the new sectors of economy that we want to develop are positioned there. It’s essential that we have a large transition fund, especially for the regions that are not going to be on top of the list for investments under the Clean Industrial Deal,” she adds. 

“What I think should happen is Europe really has to decide in which places in the future we will have industrial places based on the new energy sources. And in those regions, you have to invest in the green transition.”

Van den Berg also highlighted the importance of investing in education to secure a sustainable future for transitioning regions: 

“We should be investing in the cooperation between education, economy, and government. This triangle must be strengthened, especially in the regions that are going to make a shift in their economy. We should invest in the skills of people to make sure that we don’t end up in the situation that what we’ve seen in Limburg in the Netherlands, where the mines were closed, which brought a lot of economic backlash. We really need to make sure that economic future is secured for the people living there,” she concludes.