Climate Energy Finance (CEF) is urging Australia to become a global leader in green iron production by harnessing its abundant iron ore reserves and renewable energy potential.
A prominent Australian decarbonisation and climate science think tank, CEF has laid out a comprehensive roadmap for achieving this goal in a new report, the “Green Metal Statecraft: Forging Australia’s Green Iron Industry”.
The report warns that as global markets, especially key trading partners like China, push to decarbonise steelmaking, Australia risks losing its competitive edge if it doesn’t pivot toward green iron production.
With iron ore accounting for around one-third of Australia’s total resource export revenues, failure to act could halve these earnings.
To combat this risk, CEF is calling for a “National Green Iron & Steel Strategy” supported by clear targets and robust government policies.
Key recommendations include both demand and supply-side policies to incentivise green metal production.
Demand measures involve public procurement strategies, “contracts for difference” to bridge pricing gaps, and a Trilateral Clean Commodities Trading Company with South Korea and Japan.
On the supply side, the report suggests production tax incentives, investment in green refining technology, and $20 billion in funding for renewables-powered metal processing.
To address technical challenges, CEF has proposed a $500 million investment over 10 years to the CSIRO for research and development in green iron technologies.
The report also recommended collaboration on an Asian Carbon Border Adjustment Mechanism (CBAM), which would encourage a premium price for green iron, strengthening Australia’s trade advantage.
Australia’s shift to renewables-powered green iron production could significantly reduce global emissions from steelmaking—one of the world’s most carbon-intensive industries.
The report estimates a potential reduction of up to 1 billion tonnes of CO₂ annually, more than twice Australia’s current domestic emissions.
The CEF report positions this transition as a generational opportunity for Australia to become a renewable energy superpower.
But as other nations forge ahead, the time for Australia to act is now, CEF cautions, if it is to secure its leadership role in a rapidly greening global economy.
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