A new report from WWF-Australia warns Australia could miss out on a $100 billion green iron and steel industry if the federal government doesn’t do more to land deals with key trading partners in Asia.
Australia has eight green iron projects ready to launch and 10 megatonnes a year of projects in the pipeline, but a lack of buyers means no commercial-scale project has reached a final investment decision.
Meanwhile, competitors in the Middle East are beginning to land long-term offtake deals with Asian steelmakers.
The report, compiled by Deloitte Access Economics, argues demand-side policies are critical to unlocking green iron projects in Australia.
It calls on the Australian Government to prioritise deals with Japan, Korea and China - major buyers of Australian iron ore and global hubs for steelmaking.
Australia also imports significant volumes of steel from these countries, both in crude form and in finished goods such as motor vehicles. This creates the potential for a green trade corridor, where Australia exports green iron to Japan, Korea and China and they export products made with green steel back to Australia.
“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.”
The opportunity for Australia’s climate action efforts and economy is significant.
Decarbonising iron and steel production is an essential part of efforts to stabilise global temperature rise to 1.5°C.
Green iron could also deliver an export dividend of $96 billion to $174 billion annually and support new jobs in regional areas.
To capitalise on this opportunity, the report calls for the federal government to:
- Provide time-limited offtake support to get first projects to final investment decision
- Create targeted demand in sectors such as vehicles and infrastructure
- Strengthen trade partnerships to build export markets
It frames these measures as part of a broader “green trade statecraft” strategy.
Prime Minister Anthony Albanese and Foreign Minister Penny Wong have been active across the region securing energy partnerships and fuel supply arrangements in recent months.
A similar level of focus could be applied to positioning Australia in emerging low-emissions supply chains such as green iron and steel.
Contact details:
Paul Fahy, 0455 528 161, [email protected]
