- Exporting green iron is the best way for Australia to remain competitive as the global steel industry decarbonises
- Green iron could deliver between $96 billion and $295 billion per year to Australia's economy.
- Australia must increase the pace of renewable energy deployment to unlock this opportunity.
- Protections are needed to preserve nature, as more than half of Australia's biodiversity hotspots intersect with projects related to green iron production.
5 MARCH 2025: A new report from Deloitte and WWF-Australia has confirmed that producing iron in Australia with renewable hydrogen is the best way for Australia to remain competitive as the global steel industry decarbonises.
Steelmaking is responsible for up to 9% of global greenhouse gas emissions and must decarbonise if the world is going to stabilise temperature rise to 1.5°C in line with the Paris Agreement.
This raises serious economic and environmental questions for Australia, as the steel industry's largest supplier of raw materials like iron ore and coal.
The report, Forging Futures: Changing the nature of iron and steel production, assessed different pathways for Australia to support the decarbonisation of steelmaking in the Asia-Pacific, which is home to nine of the world's ten largest steel producers.
It found that developing Australia's green iron manufacturing capacity, producing iron with renewable hydrogen and exporting it to countries like Japan and Korea for steelmaking was the most economically competitive option for Australia.
"Exporting green iron is Australia's natural sweet spot," said Georgine Roodenrys, Partner at Deloitte Australia.
"Our massive iron ore reserves, renewable energy and green hydrogen potential, and proximity to Asian markets gives us a competitive advantage over other prospective exporters."
Other pathways analysed for the report, such as exporting green hydrogen and iron ore, and gas-based iron production, were either too expensive or unviable.
The report also assessed the impact of each pathway on Australia's natural environment.
Green iron manufacturing was again shown to be the best option, as it is not only the lowest emission pathway but also makes more land available for dual purposes.
However, there are implications for Australia's environment and First Nations communities that need to be considered.
Current or announced projects required to deliver green iron exports overlap with more than half of Australia's fifteen biodiversity hotspots, including areas in the Pilbara and Northern Kimberley.
WWF-Australia's Industry Decarbonisation Manager (Steel), Nicole Wyche said specific protections and incentives are needed to preserve nature and promote regeneration throughout the lifecycle of mining and industrial activities.
"While rapid decarbonisation is essential, if not managed effectively, it has the potential to further damage Australia's natural assets," she said.
"The decarbonisation of heavy industry is a chance to redesign our approach to industry development to prevent threats to nature and restore past damage."
Many of Australia's iron ore assets are also located on Indigenous land.
Approximately 65% of iron ore assets are on land subject to a Native Title Declaration and over 60% interface with registered Indigenous Land Use Agreements. Over 45% of announced renewable energy projects are situated on Indigenous lands. Yet only 1% of current renewable energy projects in Australia provide equity benefits to Indigenous communities, compared to 20% in Canada.
"Indigenous communities have been disproportionately impacted by mining. The transition is a chance to change this and ensure First Nations people have equity in projects and the opportunity to design better development," said Nicole Wyche.
Manufacturing green iron has the potential to deliver between $96 billion and $295 billion per year to Australia's economy.
To unlock this opportunity, the report calls for the Australian Government to increase the pace of renewable energy deployment, provide incentives for early mover green iron projects, ensure Australia is a strategic partner of choice with trading partners, and support the introduction of a carbon price for the Asia–Pacific region.
WWF-Australia welcomed the federal government's recent announcement of a $1 billion Green Iron Investment Fund as an important step, but more investment is needed to secure Australia's economic future in a decarbonising world.
"At the current pace, it would take over 100 years to deploy the necessary renewables to replace 10% of Asian steelmaking with green iron," said Georgine Roodenrys.
"Australia needs to accelerate the deployment of renewables and establish pragmatic policies that support both economic and environmental goals. By fostering partnerships with Asia-Pacific trading partners and aligning on high integrity standards, Australia can solidify its position as a leading supplier of green iron and drive global steel decarbonisation efforts," she said.
"With fast action and smart investments, Australia can be the key that transforms Asia's steel industry and construction sector," added Nicole Wyche.
"This is a chance to future-proof our largest industries and economy as decarbonisation policy, carbon pricing, and emissions regulation place ever shortening horizons on fossil fuel usage."
Read the full Forging Futures report here.
