A new report by Deloitte and WWF-Australia identifies green iron production as Australia’s best economic opportunity in the transition to decarbonised steelmaking.
The report, Forging Futures: Changing the nature of iron and steel production, highlights that producing iron with renewable hydrogen and exporting it to Japan and South Korea provides Australia with the greatest competitive advantage.
With steelmaking responsible for nearly 9 per cent of global greenhouse gas emissions, transitioning away from fossil fuels is crucial to meeting the Paris Agreement’s climate goals, the report noted.
“Exporting green iron is Australia’s natural sweet spot,” said Georgine Roodenrys, Partner at Deloitte Australia.
“Our massive iron ore reserves, renewable energy and green hydrogen potential, and proximity to Asian markets gives us a competitive advantage over other prospective exporters.”
The report found alternative pathways, such as exporting green hydrogen or gas-based iron production, to be less viable due to higher costs or logistical challenges.
It noted that green iron manufacturing not only offers economic benefits but also has the lowest environmental impact.
However, concerns remain regarding its effect on biodiversity and Indigenous communities.
The report found that current and proposed green iron projects overlap with more than half of Australia’s 15 biodiversity hotspots, including the Pilbara and Northern Kimberley.
WWF-Australia’s Industry Decarbonisation Manager (Steel), Nicole Wyche, stressed the need for safeguards.
“Rapid decarbonisation is essential, but if not managed effectively, it could further damage Australia’s natural assets,” Wyche said.
“This transition is a chance to redesign industry development to protect nature and restore past damage.”
The report also notes that around 65 per cemt of Australia’s iron ore assets are on Indigenous land, yet only 1 per cent of renewable energy projects provide equity benefits to Indigenous communities.
“Indigenous communities have been disproportionately impacted by mining. This transition is a chance to change that and ensure First Nations people have equity and a say in future projects,” Wyche added.
Green iron production could generate between $96 billion and $295 billion annually for Australia’s economy.
The report calls for increased renewable energy deployment, incentives for early green iron projects, stronger trade partnerships, and carbon pricing in the Asia-Pacific.
WWF-Australia welcomed the government’s $1 billion Green Iron Investment Fund but urged further action.
“At the current pace, it would take over 100 years to deploy enough renewables to replace just 10% of Asian steelmaking with green iron,” Roodenrys said.
“Australia needs to accelerate the deployment of renewables and establish pragmatic policies that support both economic and environmental goals.”
Wyche emphasised the urgency of action, stating, “With fast action and smart investments, Australia can be the key that transforms Asia’s steel industry and construction sector.”
The full Forging Futures report is available for further insights into Australia’s role in green steel production.
