Australia pours $1b into green iron

The Federal Government has unveiled its $1b Green Iron Fund, designed to boost manufacturing and supply chains by supporting early mover green iron projects and unlocking private investment at scale.

Up to $500m has been earmarked for Whyalla steelworks, with the other half of the pot open to applicants around Australia for both existing facilities and greenfield projects that can supercharge Australia’s world-leading iron ore industry.

Federal Climate Change and Energy Minister Chris Bowen says the energy transition is driving a manufacturing jobs boom.

“Australian manufacturing workers today — from the software lab to the steelworks and smelters — have so much to gain from the transformation underway,” he said.

“We’re ensuring Australian manufacturers directly benefit from the renewable energy investment boom [the Federal Government] is delivering, by investing in local industry to manufacture the technology we need for the transition, right here.

“This is what a Future made in Australia is all about — securing our place in the world, from our critical minerals in the ground, to harnessing the sun in the sky — and building the infrastructure we need to unlock it all here on our shores.”

The Federal Government has put strong requirements in place, like local content targets in the Capacity Investment Scheme, to make sure renewable projects employ local people and use Australian manufacturing.

While Australia makes around 5.7mt of steel each year, the country needs more investment in expanding our fabrication capacity. The Federal Government hopes the $500m investment does just that, ensuring Australian manufacturers have the backing they need to scale up and seize the opportunities our energy transition offers.

Through ARENA, the $500m allocation from the Innovation Fund will provide merit-based grants for manufacturing opportunities, including projects which build new capability in wind tower steel fabrication and related sectors.

Along with wind industry manufacturing, funds could be directed to clean energy technology manufacturing, including battery and storage technologies, hydrogen electrolysers, energy efficiency and electrification technologies and other components critical to the clean energy transition, like cables.

Federal Industry and Science Minister Ed Husic comments on the investment.

“We want a new generation of good, blue collar and engineering jobs to add value to the resources under our soil, on our shores,” he said.

“To build our economic resilience, our self-reliance and our sovereignty and to make sure that in an age of global uncertainty, we can stand on our own two feet.”

This is the first allocation from the broader $1.75b Future Made in Australia Innovation Fund.

The Chamber of Minerals and Energy of Western Australia (WA CME) has weighed in on the fund, stressing that WA must be prioritised for support through the initiative.

WA CME chief executive Rebecca Tomkinson says it is pleasing to see the Federal Government support the South Australian community of Whyalla, but stresses that WA is the sensible choice for funding through the new measure in order to fully embrace Australia’s green iron potential and the significant opportunity it creates for jobs, the economy and global decarbonisation.

“WA is already the iron ore capital of the world. It’s well established that we are best placed to become a significant manufacturer of green iron,” she said.

“As the world’s leading iron ore producer, we have strong trading relationships with steel mills across Asia that are looking to decarbonise their operations.

“Many of our members have also already invested significant time and money researching and developing prospective green iron pathways, including through partnerships with universities.

“The WA Government has also shown strong support for green iron, most recently through its $75m commitment to the NeoSmelt project in Kwinana.”

The WA CME’s Green Iron report, released in December, found large-scale production of green iron in WA could reduce global emissions by 1.2% by 2050 — effectively offsetting nearly every tonne of carbon dioxide currently produced in Australia.

It would also generate $74b in economic value and supporting 19,600 direct jobs, according to the WA CME

“WA’s iron ore producers appreciate green iron’s potential and have taken significant strides towards realising the benefits on offer,” Ms Tomkinson said.

“It is vital they are now prioritised for support through this new fund to accelerate the commercialisation of new technologies and processes suitable for WA iron ores since this is the first step in realising green iron opportunities in Australia.

“It is equally important the Federal Government commits to ensuring Australia gets the fundamentals right to maintain and expand our existing mining operations.

“That means speeding up project assessments, driving down energy costs, providing certainty over environmental reforms and repealing productivity-killing industrial relations changes.

“There can be no downstream processing — including green iron — without the mines that supply the raw materials.”