Renewables crucial for green steel, but policy must call time on coal-fired furnaces
Steelmaking needs to be electrified, investors warn, but that requires governments to commit to the end of coal-fired blast furnaces.
An investor survey has found a majority (59%) view effective climate policies as crucial for “green steel”, which most say cannot be produced by burning fossil fuels.
Most investors (81%) defined green steel as needing to be made using green hydrogen and renewable energy, and rejected projects that relied on hydrogen derived from gas or offsets to reduce greenhouse gas emissions.
Australian, American, Asian and European investors believed metallurgical coal would become more risky in the next decade.
Nearly half of respondents were directly lobbying their governments for incentives to attract renewable energy development as a crucial component for decarbonising steelmaking and reaching net zero.
The survey of 500 investors in the steelmaking, iron ore and metallurgical coal mining sectors also found support for importing green iron as a viable opportunity for steelmakers with limited access to renewable energy.
“Green iron corridors” from countries like Australia could use green hydrogen to turn iron ore into green iron pellets for steelmakers in countries such as Japan.
The survey found interest in “genuine” emissions reduction technologies such as green hydrogen-based iron-making and electric arc furnaces.
Even most investors in China (72%), the world’s biggest steelmaking region, did not believe metallurgical coal would have a long-term role in steelmaking.
The investor report was compiled before billionaire and self-styled green energy champion Andrew “Twiggy” Forrest announced 700 white-collar jobs would go from its global operations.
Despite headlines proclaiming his “hydrogen fantasy” is over, Fortescue Group has said its green iron project in WA will proceed. Nor is Fortescue withdrawing from the Port Bonython hub in South Australia.
Energy Minister Chris Bowen said Australia had more than 50 companies “actively progressing” renewable hydrogen, making the clean hydrogen investment pipeline among the largest globally at more than $225 billion.