Australia could miss out on a AU$100 billion economic windfall and falling behind global competitors in the green iron ore industry unless the federal government deploys urgent green trade statecraft to lock in buyers across Asia, according to a new report from WWF-Australia.
The report warns that while the nation has eight green iron projects ready to launch and 10 megatonnes of annual capacity in the pipeline, a critical lack of guaranteed buyers means not a single commercial-scale project has reached a final investment decision.
Meanwhile, rival nations in the Middle East are capitalising on the delay, actively landing long-term offtake agreements with major Asian steelmakers.
The report highlights that demand-side policies are now critical to unlocking domestic financing. It urges the federal government to prioritise bilateral trade agreements with Japan, South Korea, and China, the primary consumers of Australian iron ore and the epicentres of global steel production.
Because Australia also imports significant quantities of crude and finished steel from these nations, including motor vehicles, the report suggests establishing a reciprocal green trade corridor. Under this framework, Australia would export zero-emissions green iron and import the finished green steel products in return.
“Australia has the iron ore, renewable energy resources and deep trade ties to be a global green iron leader, but without clear buyers, projects cannot secure financing,” said Monica Richter, Senior Manger Low Carbon Futures.
“The Australian government will need to work with its counterparts in Asia to align supply, demand and policy in ways that create mutually beneficial trade corridors.”
Decarbonising the heavy industrial sector is considered paramount to stabilising global temperature rises within 1.5 degrees Celsius.
Beyond the climate benefits, a successful green iron sector could yield an export dividend between AU$96 billion and AU$174 billion annually, while revitalising regional employment.
To seize the opportunity, the report calls on federal government to implement time-limited offtake support for first-mover projects, mandate green steel procurement in government vehicle fleets and infrastructure, and strengthen regional trade partnerships.