This funding is intended to ensure the long term viability of the steelworks and promote its transition to more environmentally friendly steel production methods.
The Port Talbot facility is the largest steelworks in the UK.
The £500 million allocation will enable the establishment of a modern electric arc furnace for greener steel production, which is expected to reduce the UK’s entire carbon dioxide emissions by approximately 1.5%.
The proposed investment is subject to consultation and regulatory approvals led by Tata Steel.
If successfully implemented, it has the potential to safeguard over 5,000 jobs across the UK.
However, there is also concern that the transition may result in the loss of up to 3,000 jobs.
Community Union has expressed its strong opposition to the recent announcement by the UK Government and Tata Steel UK regarding investment in the Port Talbot site.
Roy Rickhuss, General Secretary of Community Union, which represents steelworkers, commented: “An electric arc furnace-only approach is short sighted, undermines the integrity of our industry and comes at the expense of our steelworkers.
“It would make us extremely exposed to the price and availability of steel scrap and risks Britain’s economic security by making British steelmaking reliant on imports of virgin steel and steel in imported goods.”