Australia’s green iron advantage at risk as projects stall and China, Africa and Middle East take the lead

Australia’s renewable energy and rich iron ore deposits make it a potential leader in green iron and steel but other nations may be closing the gap.

Australia’s window of opportunity to lead green iron production might be closing, a report has warned, as other nations catch up and local projects falter. 

Independent think tank Climate Energy Finance issues the warning in a report tracking policy and projects in the sector, including 11 green iron and steel proposals in Australia. 

No commercial plant has reached a final investment decision, the group warns, and Australia could lose out if progress stalls for another two years. 

The warning comes as the federal government considers applications to its $500 million Green Iron Investment Fund for early projects, and after a Superpower Institute study found green iron exports could generate $386 billion annually by 2060. 

The Climate Energy Finance report, called Green Metal Statecraft, analysed progress in green iron and steel projects across Europe, Africa and Asia, as well as policies supporting their development. 

Green iron is produced using renewable energy, such as hydrogen, solar and wind power, rather than coal or gas and has the potential to cut 90 per cent of emissions from the steelmaking process.

Australia has long been considered a potential leader in the industry due to its access to iron ore, renewable energy, and strong trade relationships with Southeast Asia. 

But other nations were moving faster than Australia to establish a green metals industry, lead author and net-zero transformation analyst Matt Pollard said.

“While Australia is yet to see a final investment decision for a single commercial scale, lower emission iron proposal, the Middle East and North Africa are advancing proposals at pace,” he said. 

“(The) industry now requires a step-change in the speed of execution, co-ordination across all levels of government and the political will to back Australia’s first-movers.”

Australia has 11 green iron proposals dotted across Western Australia, South Australia and Queensland, but none are ready for commercial production. 

While the federal government had launched programs to financially support their development, Climate Energy Finance director Tim Buckley said greater urgency was needed in the public and private sectors to launch projects and learn from them. 

“My key recommendation to the federal government is let’s actually get one, two or three first-of-a-kind (direct reduced iron) or green hydrogen-based iron projects at semi-commercial or commercial scale up and running,” he told AAP.

“If we don’t get any up and running in the next five years, China’s going to have them, Oman is going to have them, Saudi Arabia is going to have them … we will effectively remain a dig-and-ship quarry to the world.”

A report by The Superpower Institute found Australia could more than triple its iron ore export revenue to $386 billion a year by 2060 if it shifts to green iron. 

See also: Australia’s sliding doors moment: From “dig and ship” to trusted renewables transition partner

Source: AAP