Made in Britain, or designed in Britain? What Port Talbot teaches us about the green economy

“Ahead of an event at the LSE Festival on 16 June Oliver Harman and Riccardo Crescenzi use the regeneration of Port Talbot, a steelworks in Wales, to illustrate Britain’s place in the steel global value chain and explain what wider lessons the project holds for the country’s green industrial policy. Green industrial policy in Britain is increasingly debated through individual sites and individual sectors. For example, the debate about Port Talbot, the largest steelworks in the United Kingdom and for decades the industrial anchor of its South Wales community, has been a debate about jobs at one furnace. Tata Steel’s last blast furnaces closed in 2024 . Its £1. billion (~$1.55 billion) Electric Arc Furnace (EAF) – which melts recycled scrap steel using high-intensity electric currents rather than smelting iron ore in coal-fired blast furnaces – supported by £500 million of government funding, is under construction and due to begin recycling scrap into low-carbon steel in 2027, though the timeline has faced recent reported delays. This should cut site emissions by around 90 per cent and safeguard around 5,000 of the site’s 8,000 jobs. Both stages of that transition have been argued in terms of manufacturing: jobs saved, jobs lost and steel made. That framing captures something important, but not the whole picture. The anchor investment and the jobs it preserves are important. Yet alongside them, Port Talbot is becoming a catalyst of the full green global value chain – a set of higher-value tasks, and a set of international connections, forming around the furnace rather than inside it. The smile curve at Port Talbot Global value chains (video below for an introduction) are usefully described by a “smile curve” of value addition. Tasks at either end of the production process—research and design upstream, sales and branding downstream – capture more value than the manufacturing in the middle. Port Talbot has all of them. And because these are global value chains, each task is also a connection outward: the technology and capital are foreign, and the product and the know-how are destined for markets and supply chains well beyond Wales. The local upgrading and the international projection are the same story seen from two ends. Upstream, construction is underway on the £28 million South Wales Industrial Transition from Carbon Hub (SWITCH), a research facility led by Neath Port Talbot Council in partnership with Swansea, Cardiff and South Wales universities, that will house up to 95 researchers working on decarbonising steel and metals. Its remit is the work that makes the EAF transition function : how recycled steel performs structurally, how it integrates into circular-economy supply chains, and how to develop the advanced materials a net-zero industrial economy requires. This is the research and development (R&D) peak of the smile curve, landing in South Wales because the second-nature geography for it already exists: a steel heritage workforce, nearby universities, and proximity to the EAF itself as a working testbed. The knowledge it generates is not bounded by Port Talbot: decarbonisation research in steel is a globally contested field, and capability built here is exportable into other countries’ sustainable transitions. Next along the smile curve, the value chain extends into design (how to architect and engineer with low-carbon steel) and then fully downstream into sales and branding of “green steel” (pictured) as a premium product. Both functions, in current British practice, sit further from Port Talbot than the steelmaking does. Architectural and structural engineering capability concentrates in London and south-east England. Sales offices follow customers rather than production. And the downstream peak is inherently international: green steel is a traded product, sold into construction, automotive and infrastructure supply chains at home and abroad, where it becomes an intermediate input into the next product of the value chain. Where the selling and branding happen determines who captures that value. In between sits the manufacturing – the EAF itself, the trough of the curve in value-added terms even as it is the peak in headline job terms, melting recycled scrap into steel for onward sale. First nature, second nature The EAF’s location is not a first-nature geography story. Port Talbot was selected for second-nature reasons : an existing steelmaking site, a trained workforce, port access for scrap import and product export, and public policy – a transition funding package built around the existing plant. But the transition’s green character depends on first-nature geography. An EAF only delivers a 90 per cent emissions cut if its electricity supply is clean . In March 2026, the government committed £64 million to develop Port Talbot as the first port in the Celtic Sea — the stretch of Atlantic off south-west Wales and south-west England — specifically built to support floating offshore wind , unlocking at least 4.5 gigawatts of clean power generation. This is first-nature geography, or its local natural capital – Celtic Sea winds, deep water suitable for floating turbines, an available coastline – being deliberately mobilised to power the second-nature industrial transition. The two are co-developed. Neither would deliver green steel on its own. Logistics ties the package together. Port Talbot sits within the Celtic Freeport (with Milford Haven), with access to the M4 motorway and direct rail freight. This too is a mix of first and second nature: a coastal location given freeport designation by policy. Made in Britain, or Designed in Britain? The political vocabulary of British industrial strategy points consistently at the trough of the smile curve. “Made in Britain” is everywhere in the language of clean industrial policy . It is also the lowest value-added task on the curve. “Designed in Britain”, “Engineered in Britain” or “Branded in Britain” would commit to higher-value positions in the same chain. All three get said much less often. The £1.25 billion EAF is one form of industrial commitment. The £28 million SWITCH facility is another. The first preserves jobs and a manufacturing base. The second builds the research and skills infrastructure for the decarbonisation of an entire heavy industry – work that, if it succeeds, becomes exportable knowledge and licensable technology, captured higher on the smile curve. The two are complementary. But the public conversation has focused almost entirely on the first. Beyond this, the Port Talbot transition is fundamentally an internationalisation story. The £1.25 billion EAF investment is a decision made by Tata Steel, an Indian multinational that acquired the Port Talbot works from British ownership two decades ago, now deploying technology, capital and engineering know-how that cross borders before they reach Wales. So is the £64 million floating wind hub, attracting investment from Norwegian, French and Spanish developers in the Celtic Sea. Green industrial policy in Britain is not building these things from scratch in a closed national economy; it is shaping where, in the country, multinational lead firms choose to land the green capital they orchestrate. Head-office functions will not move to Port Talbot. Research, design, sales and branding can – but only if the institutions that attract those functions are built deliberately. A wider lesson for British industrial strategy Port Talbot is one place. But the green industrial policy lesson it offers generalises. Every region of the United Kingdom has its own configuration of first-nature geography – natural capital, port access, coastlines, mineral endowments – and second-nature geography – industrial heritage, skills, supplier networks, university clusters. Each configuration matches different functions of different green global value chains. A steel town can connect R&D, design, manufacturing, logistics and sales in different mixes. So can a chemicals cluster, a port city, or any region with industrial heritage to build on. The right question for regional green industrial strategy is which functions of which green value chains a place’s geography is best matched to. This is the question we take up at our panel at the LSE Festival on 16 June 2026, joined by Louise Hellem the Chief Economist at the CBI, Anna Valero from the Centre for Economic Performance, and Industrial Strategy Adviser to the Chancellor and David Willetts member of House of Lords and President of the Resolution Foundation. Our work on green global value chains also features in the Festival’s “ Holding power to account ” exhibition. The debate about industrial strategy will be a more productive debate if it starts from the recognition that “Made in Britain” is only one task on the curve – and that the higher-value tasks, designed, researched and branded in Britain, are where the lasting value capture lives. On 16 June Oliver Harman and Riccardo Crescenzi will take part in Green industrial policy: balancing national goals and global integration , a public event being held as part of the LSE Festival. Register here to attend in person or online . The LSE Exhibition opens on 15 June. This article gives the views of the author, not the position of LSE Business Review or the London School of Economics. You are agreeing with our comment policy when you leave a comment. Image credit: Thusbaudin Ph provided by Shutterstock. The post Made in Britain, or designed in Britain? What Port Talbot teaches us about the green economy first appeared on LSE Business Review .

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