Switch to green iron could strengthen emission cuts

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Switch to green iron could strengthen emission cuts

Australia could become a major global supplier of green metals after the announcement of a $1 billion fund to support production of green iron and steel.

Announced as part of the Whyalla steelworks transformation package on Thursday, the Green Iron Investment Fund will be split between transforming the existing South *********** steelworks plant and investing in green iron ore and steel projects.

Environmental and energy groups welcomed the move, saying it had the potential to establish Australia as a large renewable energy supplier and to cut global greenhouse gas emissions.

Green iron is produced using environmentally friendly energy sources such as renewable electricity and green hydrogen rather than coal or gas, and can cut carbon emissions from production by up to 90 per cent.

The $1 billion fund, designed in consultation with the Green Metals Expert Panel established last year, will make $500 million available to applicants with green iron and steel projects in existing and new facilities.

The fund was designed to take advantage of Australia’s existing strengths in iron and steel production, Federal Industry and Science Minister Ed Husic said, as well as the nation’s renewable energy resources.

“Green iron (is) in demand and will be in greater demand in the years to come,” he said.

“If we get this right (it’s) great for the country, great for Whyalla, and great for also regional communities and blue-collar communities that depend on the product.”

Australia is the world’s largest producer of iron ore, exporting more than 892 million tonnes of the mineral to be smelted overseas during 2023, according to the Department of Industry, Science and Resources.

But iron and steel production account for eight per cent of global carbon emissions and *********** Conservation Foundation climate policy adviser Annika Reynolds said investments in cutting that pollution could have a global benefit.

“If Australia decarbonised our iron and steel production and retained more of our iron ore onshore to smelt it here before exporting it as green steel, it could cut global emissions by as much as four per cent,” they said.

“Green iron and steel are critical parts of Australia’s future economy, while our country’s polluting coal and gas exports should be consigned to the past.”

A move from coal-fired plants to green iron and steel production could also help secure a future for Australia’s minerals industry, Smart Energy Council chief executive John Grimes said, amid increasing interest worldwide in cutting emissions.

“Global markets are demanding green iron and green metals but that’s not what we’re producing,” he said.

“Not only are our trading partners telling us that they want decarbonised product, they’re looking elsewhere to source it.”

Existing green metals projects in Australia include Fortescue’s Christmas Creek mine that is using renewable hydrogen and a green iron facility being investigated by Quinbrook Infrastructure Partners in Gladstone.

The green iron and steel fund also comes weeks after the federal government announced a $2 billion investment into green aluminium, offering a production credit to encourage producers to move to renewable energy sources by 2036.

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