Two of Tata Steel’s Dutch subsidiaries are facing a class action lawsuit in the Netherlands, seeking compensation of about €1.4 billion ( ₹14,810 crore) for alleged environmental and health-related damage.
A Dutch non-profit organisation, Stichting Frisse Wind.nu (SFW), initiated the legal proceedings against Tata Steel Nederland B.V. and Tata Steel IJmuiden B.V, Tata Steel said in a filing with the stock exchanges on Friday.
SFW claims to represent residents living near Tata Steel’s IJmuiden plant in Velsen-Noord. It alleges that emissions from the steelmaker’s operations, including hazardous and harmful substances, have negatively impacted public health and the quality of life in the surrounding areas.
SFW is seeking compensation for “increased susceptibility to health issues among residents, as well as loss in the enjoyment and value of homes in the region.” It contends that average home prices in the area lag behind those in comparable regions and attributes this to the steel plant’s operations.
Responding to the allegations, Tata Steel said SFW’s claims lack merit and that its Dutch subsidiary “has strong arguments to defend against the claims and will vehemently defend itself against these claims.” The company added that SFW has not provided any supporting evidence and described the compensation demand as speculative and without basis.
Tata Steel’s stock closed 0.50% lower, while the benchmark index Sensex closed 0.43% lower on Friday.
“1.4 billion euros is material. However, Tata Steel has stated it will study the claim and assess its potential implications. The company will defend its position legally, and explore how the case evolves,” said Aditya Welekar, a senior research analyst at Axis Securities. “The stock has not reacted sharply, which suggests the market is not factoring in a material immediate impact. On a broader level, Tata Steel is already engaged in discussions around ESG and emissions and is investing significantly in green initiatives.”
According to the steelmaker’s filing, the proceedings will be under the Dutch Act on Collective Settlement of Mass Claims (WAMCA). The case will first go through an admissibility phase, followed by a merits phase. Each phase is expected to take two to three years to conclude. According to Tata Steel, since the case will be heard under WAMCA, the discussions on the actual compensation amount are not expected in the near term.
Tata Steel highlighted that the class action is financed by third-party litigation funders. According to the disclosure, the class action is financed by Redbreast Associates N.V. and Omni Bridgeway S.A. SFW has stated that its financiers could receive either a multiple of their investment or up to 25% of any compensation awarded.
The company said health and environmental protection remain key priorities. It also pointed to its Green Steel Plan, developed in coordination with the Dutch government.
Tata Steel signed a non-binding agreement with the Netherlands government on 29 September to receive up to €2 billion of financial aid to reduce emissions at its Dutch facility. According to the government, Tata Steel will have to spend €4 billion to €6.5 billion in total to cut emissions at its Netherlands operation to comply with regulations.
The remaining funds will come from the company’s cash flows, debt and from parent company Tata Steel. It has also applied for a grant of about €300 million from the EU Innovation Fund.
Tata Steel came to own both the IJmuiden plant and Port Talbot in the UK as part of its 2007 acquisition of Europe’s Corus Steel. The IJmuiden plant has a capacity of 7 million tonnes per annum.
Tata Steel’s Netherlands operations have faced similar allegations in the past. In December 2024, it received two penalty orders from the Environment Agency of the Netherlands, which fined it ₹239 crore for non-compliance with emission thresholds.
In a separate notice at the time, the environmental watchdog threatened to shut one of Tata Steel’s two coke and gas plants in the country if it didn’t comply with certain conditions within 12 months. To this, the steelmaker said that the orders and notices were “unlikely” to lead to a shutdown of Tata Steel’s coke and gas plants and it planned to file objections against the orders and the notice with the appropriate authority in due course.
Tata Steel did not respond to an email from Mint, seeking comment on the developments.
In 2023, the National Institute for Public Health and the Environment (RIVM) said life expectancy around Tata Steel’s steel factory was 2.5 months lower due to exposure to fine particles and nitrogen dioxide.
“The current level of emissions from the Tata Steel site is putting people who live in the IJmond region at an elevated risk of disease,” RIVM said. IJmuiden is the most famous town in the IJmond region.