Growing Australia's iron advantage
28.11.2024 - 03:47
Our latest report, commissioned by Boundless, presents new research that reveals Australia's ability to competitively supply 20% of global green iron by 2050. This would reduce global steel emissions by 1.7% - surpassing Australia's current total emissions of 1.2% - while adding $103 billion to the economy and supporting 27,500 direct jobs. However, realising this opportunity requires addressing significant challenges including a significant build out of renewable energy generation, storage and transmission and the commercialisation of green iron technologies. Urgent policy support is needed to address these challenges and unlock private investment.
Australia could produce 20% of global green iron by 2050...
• 53% of global steel production in 2050 is forecast to be green (30%) or lower emissions (23%) steel
• The shift away from conventional steelmaking will create new supply chains
• Australia has the renewable energy capabilities to produce green iron, particularly compared to other iron ore exporters and existing iron producers
• Australia is forecast to be a cost-competitive producer of green iron in 2030 and 2050 if the industry can get to scale
• Australia could supply 20% of global green iron in 2050 (310Mt)
...reducing global emissions by 1.7% and generating growth
• Steel production is highly emissions intensive, generating between 6% to 9% of global CO2 emissions
• Ironmaking is the most emissions intensive part of the steel value chain, responsible for up to 90% of emissions
• Australia's green iron potential is equivalent to reducing global steel emissions by 1.7%, surpassing Australia's current emissions (1.2% of global emissions)
• Australia's green iron potential could add $103 billion to the economy and support 27,500 direct jobs in 2050
The industry faces short-term feasibility and scale challenges
• Australia's green iron potential requires 16TWh of additional renewable energy generation by 2030 and 775TWh by 2050 (nearly 2.4 times the National Renewable Energy Target for 2030)
• >90% of this electricity is used to make green hydrogen
• $28.8 billion of investment could be required by 2030 to kick-start green iron production, including a production plant, hydrogen facility and renewable energy and battery systems
• Approvals processes and the risk of new technologies continue to be barriers to investment
Policy solutions should prioritise these immediate issues
• In the short term, key barriers are the feasibility of early-stage technologies, scale of infrastructure required and availability of capital
• Policy initiatives should urgently address these barriers to enable large-scale investment and drive industry growth
• As the industry moves towards a 'scale-up' phase, additional support will be required to maintain Australia's forecast cost competitiveness, connect Australian supply to demand, and develop a skilled workforce
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