We’ve been working on a very exciting report with our colleagues across the environmental, union and industry sectors. The resulting report – Forging Our Future – outlines a path forward for Australia to build a Green Iron industry. We think investing in Green Iron will solve some key challenges facing our country right now and bring a number of important benefits:
Benefits of Green Iron:
- Green Iron offers massive benefits to the climate through emissions reductions from the global steel industry.
- Is a key employment pathway for workers currently in fossil fuel based industries.
- Would be a major economic booster that will have sustained impact.
- Solves the challenge of how we export renewable energy – by using it onshore to transform our iron ore into a green resource ready to export.
- Creates an investment focus for renewable energy development at a scale that can also decarbonise our existing electricity grids and industries.
We see Green Iron playing a key role in both reducing carbon pollution and in providing an important economic opportunity for Australia. In fact, there may also be serious economic risks if we don’t act on Green Iron.
Why Australia should choose Green Iron?
Australia currently has an oversized contribution to global emissions due largely to the export of coal and gas. Given the urgent need for the world to decarbonise there is an opportunity for Australia to switch into a new role where, instead of shipping out fossil fuels, we export the clean solutions to the world. Exactly how we do that is important though and Green Iron production is forming as a leading option.
What is Green Iron?
At its most simple definition, Green Iron is iron that has been refined using renewable based energy.
Most Australians (and definitely most Western Australians) are aware of our world leading and economy sustaining role in iron ore production, largely from the Pilbara region of WA. Along with vast quantities of iron ore we also have world leading potential in renewable energy production. What Green Iron does is match those resources together to create a valuable product needed for global steel making that simultaneously creates a globally significant reduction in harmful greenhouse gas emissions.
How would green iron production work in Australia?
Currently the global steel making process is a major climate polluter and one that is difficult to decarbonise. It is calculated to contribute about 7-9% of global emissions (that is an awful lot!) and the bulk of those come from the iron making process. This is where the raw iron ore dug out of the ground is put through a very high heat blast furnace currently fuelled by either gas or coal.
Emissions from producing Australian iron ore and turning it into steel (which mostly occurs overseas) are 3 times larger than Australia’s whole-of-economy emissions. Thus if Australia were to host the most energy intensive part of the steel making process – turning iron ore into pure iron – we would not only generate hundreds of jobs and boost our economy, we would also make a massive contribution to global emissions reductions. For that to happen though, it must be powered by renewable energy.
With most of the Green Iron opportunity lying in WA, we have also released this list of actions for the WA State Government to adopt to ensure the right settings are in place. WA has so far been at the back of the pack when it comes to the build out of large scale renewable energy but with the right policies and investments it could quickly switch into a world leading position.
In fact, the world needs WA to come to the renewable party. If we are going to reduce global emissions quickly enough to avoid the worst climate impacts, WA needs to be leading on renewable based industries like Green Iron.
Key export markets are at risk if we don’t act on Green Iron
As the world picks up the pace of its decarbonisation agenda, two of Australia’s main exports that generate a significant proportion of our national wealth will be increasingly less desirable – coking coal and iron ore. These are the key base ingredients in the current production of global steel. Clearly, coking coal will need to be phased out as a fossil fuel but there is also a risk to our iron ore industry given the relatively low quality of the majority of our ore.
The Forging Our Future report points out that “the bulk of what is exported from the Pilbara is not compatible with the predominate existing green steel technologies.” This means most of Australia’s iron ore risks no longer being of sufficient quality to remain competitive on the global market and steel producing countries will increasingly look to other locations for their iron ore.
This is a massive risk to Australia’s single largest export industry, worth $136bn in 2023. Australia needs to get on the front foot with Green Iron and the Forging Our Future report highlights a range of actions to ensure we are not left behind.
What’s stopping Australia from transitioning to Green Iron?
Establishing a Green Iron industry does not come without challenges. It will not be cheap to establish and there is still work to do to get it ready for scalability. There will be some challenging decisions to make when it comes to minimising the impacts of the accompanying new large scale renewable energy. And we will need to negotiate with our trading partners as the world pivots to a renewable based economy. That is why we have the list of recommendations in the Forging Our Future report, so we don’t miss out on the opportunity and so we get the balance right on the policy settings.
Let’s get on with Green Iron!
Green Iron is a massive opportunity for our climate and our economy. There is still important work to be done to make sure it minimises any environmental impacts and maximises benefit across the community but Australia needs to get the ball rolling so we are not left behind in the global shift to decarbonise.
