A new report from BloombergNEF examines how Australia could leverage its abundant resources to produce low-carbon iron and become a major exporter in the decarbonised global steel supply chain.
The report, titled Decarbonised Iron: Australia’s Next Step in Global Steel Supply Chain, analyses the products, services and policies needed as steelmakers transition away from fossil fuels to meet climate targets.
It looks at how trade flows may shift as a result.
“As the world moves to a low carbon future, Australian miners will have to adapt or face major disruptions in their iron ore exports,” said Caroline Chua, BloombergNEF Energy Transition Supply Chain Specialist and author of the report.
While some steelmakers may attempt carbon capture technologies, Chua notes these could prove challenging to scale and expensive if captured emissions must be exported for storage offshore.
Instead, the report finds Australia is well-positioned to produce and export cost-competitive low-carbon iron products to help steelmakers decarbonise.
This emerging green iron industry could drive demand for Australian hydrogen and support the country’s ambition to become a “renewable energy superpower”.
However, Chua cautions Australia is not alone and will face competition in higher-grade iron ore and green iron markets from other resource-rich nations.
“Policy, trade, and technology partnerships will be critical for Australia to secure its place in the global race towards green iron and low-carbon steel,” she said.
Leonard Quong, Head of Australian Research at BloombergNEF, highlighted the firm’s ongoing analysis of Australia’s energy transition opportunities across power, transport, industry and more.
Quong stated that their team of experts is closely examining pathways for Australia to leverage its resources and position itself for success as global commodity markets are reshaped by decarbonisation efforts.
The full report is available to BloombergNEF research subscribers.
