Tata Steel DAC Initiatives for 2025: Key Projects, Strategies and Partnerships

Tata Steel’s Carbon Capture Gambit: From Pilot to Portfolio

From Foundational Pilots to a Diversified Strategy

Between 2021 and 2024, Tata Steel’s approach to carbon capture was characterized by foundational, high-profile actions. The commissioning of India’s first blast furnace carbon capture plant in Jamshedpur in 2021, with a modest capacity of 5 tonnes per day, served as a crucial proof-of-concept. This initial phase was about establishing feasibility and securing strategic buy-in, exemplified by the preliminary agreement with the UK government in 2023 for the Port Talbot green steel project. The partnerships formed during this era, such as with BHP and ABB, focused on exploring broad decarbonization pathways for existing blast furnace operations. This period established carbon capture as a viable, albeit nascent, component of its long-term strategy.

A significant inflection point occurred starting in 2025. The strategy evolved from singular pilot projects to a more diversified and targeted portfolio of research and development initiatives. The launch of the ADAPT-EAF research initiative with UK universities signifies a deliberate shift towards developing specialized low-CO2 steel for electric arc furnaces—a direct enabler for the Port Talbot transformation. Concurrently, the engagement in pilot partnerships to test Direct Air Capture (DAC) sorbent materials in India indicates an expansion of scope beyond point-source capture. This move from a single-technology demonstration to a multi-pronged R&D approach reveals a maturing strategy. It highlights an understanding that no single solution will suffice, creating an opportunity to lead in multiple decarbonization technologies but also introducing the threat of spreading resources too thinly across unproven pathways.

A Strategic Allocation of Capital for a Green Transition

Tata Steel’s investment strategy underscores a decisive pivot towards green steel production, backed by significant capital commitments. These investments are not just about capacity expansion but are intrinsically linked to the company’s decarbonization roadmap, funding the transition from legacy assets to next-generation steelmaking technologies like electric arc furnaces, which are often paired with carbon capture solutions. The following table outlines the key financial commitments that are shaping this transformation.

Table: Tata Steel’s Key Decarbonization and Expansion Investments

Building an Ecosystem for Decarbonization

Partnerships are the central pillar of Tata Steel’s decarbonization strategy, enabling the company to access cutting-edge technology, share risks, and influence policy. The collaborations span technology providers, academic institutions, corporate peers, and governments, creating a powerful ecosystem for innovation. This network has evolved from exploratory agreements to highly specific research and implementation projects, demonstrating a clear progression in the company’s approach to collaborative development.

Table: Tata Steel’s Key Carbon and Sustainability Partnerships

A Tale of Two Hubs: India and the UK

Between 2021 and 2024, Tata Steel’s carbon capture activities were geographically anchored in India and the UK. India was the site of tangible, albeit small-scale, implementation with the commissioning of the 5 TPD carbon capture plant at the Jamshedpur Works. This positioned India as the center for initial technological validation. In parallel, the UK emerged as the focal point for large-scale strategic planning, culminating in the 2023 proposal and subsequent 2024 funding agreement for the £1.25 billion green steel project at Port Talbot. This dual-country focus reflected a strategy of piloting technology in India while planning major capital-intensive transformation in the UK, driven by different regulatory and government funding environments.

From 2025 onwards, the geographic focus has both deepened and expanded. The UK has transitioned from a planning hub to an active R&D center with the launch of the ADAPT-EAF initiative, which directly supports the Port Talbot project. This signals that the UK is now a critical region for developing the specific applications needed for the green transition. Simultaneously, activity in India has broadened from a single-site demonstration to multi-party R&D with the DAC sorbent testing pilots involving peers like JSW and NTPC. This collaboration indicates India is becoming a testbed for next-generation capture technologies beyond the blast furnace. The addition of an Australian partnership with InQuik, while not directly a carbon capture project, points to a wider geographic lens for innovation, suggesting a future where technology sourcing and market development become more globally distributed.

Technology’s Journey from Demonstration to Diversification

In the 2021–2024 period, Tata Steel’s engagement with carbon capture technology was firmly in the pilot and demonstration stage. The landmark achievement was the commissioning of the 5 TPD plant at Jamshedpur in 2021. This was a critical validation point, moving the technology from a theoretical concept to an operational reality within an Indian steelmaking context. It successfully demonstrated the technical feasibility of capturing CO2 from blast furnace gas. However, its small scale meant it remained a demonstration project, far from commercial-scale deployment. The partnerships formed during this time were largely exploratory, focused on investigating pathways like hydrogen and biomass, reinforcing the early-stage nature of the overall technology adoption curve.

The period from 2025 to today marks a clear shift from a single demonstration to a portfolio of technologies at varying maturity levels. While point-source capture remains a focus, the technology is now being adapted for new applications. The ADAPT-EAF research initiative is moving the conversation towards technology integration with electric arc furnaces, a step beyond the initial blast furnace pilot. This is no longer just a demo but targeted R&D for a specific commercial goal. Furthermore, the exploration of Direct Air Capture through lab-scale sorbent testing represents an entry into an even earlier-stage, but potentially disruptive, technology. The retirement of the coke oven battery at Jamshedpur in January 2025 is a physical manifestation of this technological transition, marking the beginning of scaling down legacy, high-emission assets in favor of these emerging greener technologies.

Table: SWOT Analysis of Tata Steel’s Carbon Capture Strategy

The Year Ahead: From Research to Results

The most recent data from 2025 signals a pivotal year ahead for Tata Steel, where the focus will shift from planning and piloting to execution and early-stage R&D maturation. The market should watch for tangible progress on the Port Talbot electric arc furnace project, as it moves from a financial agreement to the initial stages of construction. This will be the most significant signal of the company’s ability to execute its large-scale decarbonization strategy. Concurrently, the outcomes of the ADAPT-EAF research and the DAC sorbent testing pilots will be critical indicators of future technological pathways. Positive results could accelerate investment in these areas, while setbacks may force a strategic re-evaluation. The key signal gaining traction is the move toward a portfolio approach—balancing large-scale, proven technology deployment (EAFs) with strategic bets on next-generation solutions (DAC). Investors and industry observers should pay close attention to how Tata Steel manages this complex portfolio, as its success will be a bellwether for the entire steel industry’s green transition.

Frequently Asked Questions

How has Tata Steel’s carbon capture strategy evolved since 2021?
Initially, the strategy focused on proving the concept with a single pilot project, the 5 tonnes per day carbon capture plant at the Jamshedpur blast furnace (2021). Since 2024-2025, it has evolved into a diversified portfolio approach. This now includes large-scale implementation of proven green technologies like the electric arc furnace at Port Talbot, alongside targeted research and development into next-generation solutions like Direct Air Capture (DAC) and specialized low-CO2 steel.

What is the significance of the £1.25 billion Port Talbot project?
The Port Talbot project is the cornerstone of Tata Steel’s UK decarbonization strategy. It represents a major pivot from small-scale pilots to large-scale commercial implementation of green steel technology. Supported by a £500 million UK government grant, the project involves replacing legacy blast furnaces with a state-of-the-art electric arc furnace, which is critical for achieving the company’s long-term emissions reduction goals.

What are the main technologies Tata Steel is using or exploring for decarbonization?
Tata Steel is pursuing a multi-technology strategy. This includes: 1) Point-source carbon capture from existing blast furnaces (Jamshedpur pilot), 2) Electric Arc Furnaces (EAFs) for green steel production (Port Talbot project), 3) Direct Air Capture (DAC) through new R&D partnerships, and 4) Exploring the use of green hydrogen, as seen in its MoU with Welspun Corp. This portfolio approach balances deploying mature technologies with investing in future solutions.

Why are partnerships a central pillar of Tata Steel’s strategy?
Partnerships are crucial because they enable Tata Steel to access cutting-edge technology (like with Carbon Clean and UK universities), share the immense financial risks and costs associated with large-scale projects (like the UK government grant for Port Talbot), and collaborate with peers (like in the DAC pilots and First Movers Coalition) to accelerate innovation and build a market for green products.

What are the biggest risks Tata Steel faces in its decarbonization journey?
According to the analysis, the primary risk has shifted from technological uncertainty to execution risk. The main challenges now are successfully managing the massive £1.25 billion Port Talbot project on time and on budget, and ensuring that its diverse portfolio of new R&D initiatives, like Direct Air Capture, yields viable results quickly enough to meet its ambitious 2045 net-zero target without spreading resources too thinly.

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