Britain’s government has announced a new support package for workers facing job losses at the largest steel plant in the country as it transitions to a more environmentally friendly mode of production. Business Secretary Jonathan Reynolds detailed the plan on Wednesday, revealing that workers will receive improved severance terms and a reskilling package if they opt for it. The government’s new Labour administration, elected in July, will uphold the previous Conservative government’s commitment to provide Tata with 500 million pounds ($650 million) to aid in the shift to the new electric furnace technology.

Tata Steel had previously announced plans to close its two remaining blast furnaces in favor of a new electric furnace, with the transition potentially resulting in the loss of up to 2,800 jobs. One furnace has already ceased production, while the other is scheduled to follow suit later this month. The switch to the 1.25 billion-pound electric furnace, which uses scrap metal to produce steel, is set to be completed by 2027.

Reynolds expressed some dissatisfaction with the deal, attributing any shortcomings to the previous government for not securing a better outcome with Tata sooner in the transition process. Additionally, he confirmed the government’s commitment to investing an additional 2.5 billion pounds in the industry in the years ahead. Emphasizing the importance of steel in achieving net zero carbon emissions goals and developing green infrastructure, Reynolds stated that the deal offered was the best possible result within a two-month timeframe.

The government is set to release a steel strategy in the coming spring, with Tata committed to evaluating future investment opportunities. Unions representing steelworkers have been advocating for enhanced support from the new government to safeguard as many jobs as possible. While acknowledging that the deal is not cause for celebration, the Community and GMB unions expressed that it is an improvement from the previous devastating plan outlined.

The closure of the blast furnaces dealt a significant blow to Port Talbot, a town heavily reliant on the steel industry since the early 1900s. The town’s steelworks once employed around 20,000 individuals in the 1960s, but faced challenges from cheaper imports over the years. The steel sector currently contributes 0.1% to the British economy and accounts for 2.4% of the country’s greenhouse gas emissions, as per data from the House of Commons Library.