An Italian court on Friday upheld an order to shut down the blast furnaces at the former Ilva steelworks in Taranto, dealing a setback to Prime Minister Giorgia Meloni’s efforts to keep the country’s largest steel plant operating while a buyer is sought. The plant is considered strategically important to Italy’s manufacturing sector and supplies steel to industries including construction and automotive.

The Milan Court of Appeal rejected an appeal by operator Acciaierie d’Italia against an earlier ruling that ordered the shutdown and remediation of the plant’s hot-end facilities over inadequate environmental safeguards. The decision adds uncertainty to the future of the sprawling complex, which has long faced disputes over pollution, public health, jobs and industrial policy.

The Taranto plant directly employs around 8,000 workers and supports a large network of contractors. The government is seeking investors for the company, which is under extraordinary administration, while officials have not ruled out maintaining a public stake. Italy is also considering a greener future for the steel industry, including electric arc furnaces powered by direct reduced iron (DRI).

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