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Tata Steel Warns UK On ‘Over The Top’ Green Policy

The head of the European division of Tata Steel of India has warned that a planned £1.2bn investment programme by his company in Britain could be put at risk by the UK government’s “over the top” climate change policies directed at heavy industry.

Karl-Ulrich Köhler told the FT that efforts by the government to load extra costs on to industry in the cause of satisfying the political goal of making the UK the greenest country in Europe was a “race for leadership” that he had difficulty understanding.

Although coalition ministers have signalled in recent weeks that they may rein back on plans to make the administration “the greenest government ever”, Mr Köhler regards this as a battle industrial groups have still not won.

The European division of Tata Steel, formerly Corus, is one of the UK’s largest manufacturers, employing 20,000 people mainly in steelmaking centres in south Wales and Scunthorpe, Lincolnshire.

The steel industry is one of the biggest producers of carbon dioxide implicated in climate change.

Mr Köhler is a German steel executive who took the helm of Tata Steel’s Europe division last year. The company’s European operations also include a large steel plant in the Dutch port of IJmuiden.

In an interview at a steelmaking conference in Paris, Mr Köhler said the UK government’s plans to increase the financial penalties for companies whose operations created large quantities of CO2 could rebound. This was because such policies could provide incentives for companies such as Tata to shift capital projects to countries where environmental standards were less onerous.

Mr Köhler is planning a £1.2bn programme in the company’s UK steel works in the next five years to improve efficiencies and increase quality. “We [Tata] are keen to invest in the UK . . . and we think we should be getting more support [from ministers],” he said.

The investment programme – running at about £250m annually – is about 30 per cent higher than Tata Steel has invested in the UK in recent years.

Mr Köhler said the European Union regime to force companies to curb CO2 emissions was probably the toughest in the world. “Why the UK government wants to go further and be the leader in Europe in this field is difficult for me to understand. It’s a race for leadership that is simply over the top,” he said.

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