Government Crafts Lifeline for Ilva-Linked IndustriesAmid economic headwinds & industrial uncertainty, Italy is preparing a decree law to financially support the industrial chain tied to the former Ilva steelworks in Taranto. The goal is to prevent the collapse of dozens of connected firms whose survival depends on Ilva’s production continuity. Minister of Enterprise & Made in Italy, Adolfo Urso, confirmed that a dedicated technical group will be formed with court-appointed commissioners to accurately differentiate between companies that suffered genuine damages and those less impacted, ensuring fair compensation distribution.

Technical Team to Assess Real Impact & Allocate FundsUrso emphasized that decisions will be made based on “objective data, not speculative assumptions.” The decree will quantify necessary financial injections, potentially amounting to hundreds of millions of $ in public aid. This initiative aims to stabilise subcontractors who handle logistics, machinery, environmental maintenance, and specialized metallurgical services vital to the Taranto ecosystem. The technical group will also consult economic analysts, labour union observers & industrial engineers for data-backed evaluations.

Collaboration Pact with Puglia Region Gains MomentumIn an effort to prevent administrative bottlenecks, the central government is entering a program agreement with local stakeholders including the Puglia Region, the Municipality of Taranto, the Province, the Port Authority & key ministries. The collaboration will focus on securing regulatory clearances such as the Integrated Environmental Authorization and dock permissions for a temporary regasification vessel. Urso acknowledged “constructive dialogue” with regional authorities, noting their cooperation as crucial for unlocking green steel funding & emission control compliance.

Decarbonisation Blueprint & Furnace Timeline DisclosedThe steel plant’s renaissance hinges on a 12-year decarbonisation plan involving construction of three electric arc furnaces, direct reduced iron modules powered by gas, and CO₂ capture facilities. Each furnace will take approximately four years to build. These changes will reduce carbon intensity by transitioning away from traditional blast furnaces, a requirement to comply with EU emissions targets. The long-term plan reflects a structured shift, allowing time for retraining workers, securing industrial permits & testing cleaner technologies.

Accident Alters Trajectory, Halving Current ProductionThe transformation has been complicated by a recent incident. On May 7, a technical failure affected Blast Furnace 1, which forced the site to halve its production output, from 4 million metric tons to just 2 million annually. Currently, only one blast furnace remains operational, with Furnace 2 undergoing maintenance and expected to be back in 4–5 months. Blast Furnace 4 will follow with a 2–3 month maintenance window. The situation has already impacted jobs, contracts and export timelines, triggering emergency intervention talks at the national level.

Azeri Involvement Continues Despite Delays & SetbacksThe Baku Steel Company, part of the Azerbaijani consortium in negotiations to take over the plant, has revised its investment roadmap in response to the production incident. Salvatore Toma, President of Confindustria Taranto, stated that the Azeri plan still holds but now requires more public funding upfront. “The state must front the billion $ transition costs,” he said, underlining the importance of resuming furnace operations swiftly. He stressed that restarting Furnaces 1 and 2 is essential to prevent further loss of market share and supplier attrition.

Linked Industries to Lead Maintenance & Transition WorksWhile steel output is temporarily curtailed, related industries will remain operational through maintenance assignments and facility upgrades. These tasks include cleaning, inspection, equipment overhauls, refractory work, and pipeline inspections. Nicola Convertino, President of Aigi Taranto, stated that “hundreds of skilled workers will be required” during both medium-term maintenance and long-term transformation phases. He described this period as a “breathing space” for institutional trust-building, calling the government-region partnership “constructively peaceful.”

Regasification & Environmental Clearance Hold the KeyFor investment talks to proceed and decarbonisation to succeed, three prerequisites remain: approval for the regasification vessel mooring, final issuance of the AIA, and ensuring furnaces are functioning. Without these, Baku Steel’s capital infusion is unlikely. Minister Urso reiterated the urgency of the regulatory milestones, explaining that “no private investor will commit without operational stability.” As the Italian State prepares a decree law in early June, estimates suggest public support may exceed $1.5 billion to revive the industrial heartbeat of Taranto.

Key Takeaways

• Italy will pass a decree law in June to financially support companies affected by Ilva’s reduced production, based on objective data.

• A 12-year decarbonisation plan will replace blast furnaces with three electric arc furnaces & DRI modules, aiming to meet EU green standards.

• The Azerbaijani consortium’s plan is still active but now requires substantial upfront public investment due to the recent furnace failure.