A new report by WWF-Australia, titled Australia’s Green Iron Key, outlines the strategic steps necessary for Australia to become a global leader in green iron manufacturing and decarbonise the iron and steel industry.
The report highlights the potential for Australia to leverage its position as the world’s leading exporter of iron ore to spearhead the transition to greener steel production, particularly with its major trading partners in Asia.
Iron ore is Australia’s most valuable export, contributing 33 per cent of the country’s export income, amounting to $138 billion in 2023-24.
However, the steel industry is a significant contributor to global greenhouse gas emissions, responsible for up to 9 per cent of the total emissions.
The report emphasises the urgent need for Australia to decarbonise its iron and steel production to align with global efforts to stabilise the rise in temperature in accordance with the Paris Agreement.
The WWF report proposes a $10 billion domestic support package aimed at decarbonising the existing iron ore and steel industry, alongside prioritising export-focused green iron projects.
Nicole Wyche, WWF-Australia’s Industry Decarbonisation Manager, stresses the importance of fast and deliberate action to establish Australia as a key player in the green steel manufacturing sector.
The economic benefits of transitioning to green iron are substantial.
A single green iron plant could add $85 billion to Australia’s GDP and create 1,540 full-time jobs, while significantly reducing emissions compared to conventional steel production methods.
The report calls for enhanced strategic partnerships with key trading partners, including Japan, Korea, and China, to develop a regional green iron and steel initiative.
This collaboration is seen as crucial for building a green iron corridor from Australia to Asia, thereby supporting mutual economic interests and advancing the decarbonisation efforts of steel supply chains.
While the opportunity is significant, the report warns of the risks associated with a passive approach. Australia must act swiftly to avoid losing its competitive edge to other international players who are also vying for leadership in the emerging green steel market.
The development of renewable hydrogen supplies and the transition of iron ore mining and steel-making facilities to operate on renewable energy are identified as key priorities.
Australia stands at a pivotal moment to redefine its role in the global iron and steel industry.
By adopting the recommendations outlined in the WWF report, Australia can secure its place as a leader in low-emission iron production, contributing to global decarbonisation goals while bolstering its own economic future.