A recent BloombergNEF report explores how Australia can harness its vast resources to manufacture low-carbon iron, establishing itself as a key player in the global shift towards a sustainable steel industry.
Green Iron: The Key to a Low-Carbon Steel Future
The report, titled “Decarbonised Iron: Australia’s Next Step in Global Steel Supply Chain,” delves into the products, services, and policies required for steelmakers to transition away from fossil fuels and achieve their climate goals.
It also examines the potential shifts in global trade flows as a result of this transition.
Caroline Chua, a BloombergNEF Energy Transition Supply Chain Specialist and the report’s author, emphasizes that Australian miners must adapt to the changing landscape or face significant disruptions in their iron ore exports as the world moves towards a low-carbon future.
Australia’s Competitive Advantage in Green Iron Production
While some steelmakers may explore carbon capture technologies, the report notes that scaling these technologies could be difficult and costly, especially if they need to transport captured emissions offshore for storage.
Instead, it finds that Australia’s ideal position allows it to produce and export cost-competitive low-carbon iron products, contributing to the decarbonization efforts of steelmakers worldwide.
This emerging green iron industry could stimulate demand for Australian hydrogen and bolster the country’s aspirations to become a “renewable energy superpower.”
However, Chua cautions that Australia faces competition from other resource-rich nations in the higher-grade iron ore and green iron markets.
Collaboration as a Path to Success
Chua emphasizes the importance of policy, trade, and technology partnerships for Australia to secure its position in the global race towards green iron and low-carbon steel.
Leonard Quong, Head of Australian Research at BloombergNEF, highlights the firm’s ongoing analysis of Australia’s energy transition opportunities across various sectors, including power, transport, and industry.
Quong’s team is closely examining how Australia can leverage its resources to position itself for success in global commodity markets that are undergoing transformation due to decarbonization efforts.
The complete report is available to BloombergNEF research subscribers, offering a comprehensive analysis of Australia’s potential to become a major exporter of low-carbon iron in the decarbonized global steel supply chain.