The push for Green Iron: Can Australia lead the global transition?
The Australian Government’s $1 billion Green Iron Investment Fund aims to support green iron production, secure jobs, and strengthen local supply chains, with half of the funding allocated to Whyalla Steelworks and the rest available nationwide. Industry and environmental groups have welcomed the move, highlighting its potential for economic growth and emissions reduction.
Last month, the Albanese Government announced a $1 billion Green Iron Investment Fund to support green iron manufacturing and supply chains. The fund is designed to encourage early-stage projects and attract private investment to advance low-emission iron and steel production in Australia.
Up to $500 million will be allocated to the transformation of Whyalla Steelworks, ensuring ongoing employment in the region while assisting in the energy transition. The remaining funds will be available to projects across the country, including both existing facilities and new developments. The aim is to enhance value-adding in the iron ore sector, strengthening Australia’s role in the global shift towards low-carbon steel.
Australia, as the world’s largest iron ore exporter, generated over $100 billion in export income in 2023-24, with the iron and steel sectors providing employment to more than 100,000 people. The government’s investment is intended to safeguard future demand for Australian iron ore as international markets seek lower-emissions steel.
Industry bodies and environmental groups have responded positively to the announcement. The World Wide Fund for Nature-Australia (WWF-Australia) has backed the initiative, citing its economic and environmental benefits.
Nat Burke, Head of Regenerative Climate at WWF-Australia, described the fund as a step towards reducing emissions in a sector responsible for 8% of global CO2 output. “Decarbonising iron and steel production is essential if we are going to stabilise global temperature rise to 1.5°C,” he said.
The Australian Hydrogen Council (AHC) has also expressed support, with CEO Dr Fiona Simon foreshadowing the fund’s role in supporting hydrogen-based iron production. She described the initiative as a way to ensure Australia remains competitive in green iron while maintaining and growing export opportunities.
“Hydrogen is an important feedstock to produce green iron. It’s incredibly important that hydrogen, and demand-side policy and incentives such as the Hydrogen Production Tax Incentive, Hydrogen Headstart, and the Green Iron Investment Fund, can work together to close the commercial gap,” Dr Simon said.
Academics have noted the broader implications of the fund. Associate Professor Stuart Walsh of Monash University’s Civil Engineering department pointed out that scaling up green iron production is a key challenge for the industry.
“While hydrogen-based direct reduction and emerging techniques like molten oxide electrolysis hold great promise, their success hinges on affordable renewable energy and infrastructure,” he said.
Dr Changlong Wang, also from Monash, remarked that the Whyalla investment aligns with international decarbonisation initiatives, such as the EU’s Clean Industry Deal. “With Australia’s rich hematite and magnetite reserves and abundant renewable energy potential, this investment could give our green iron sector a competitive edge,” he said.
The government has framed the initiative as part of its broader commitment to Australian industry. Prime Minister Anthony Albanese said, “Labor’s plan for a Future Made in Australia is very clear: we want Australia to make more things here.” Industry Minister Ed Husic added that the fund would help Australia leverage its iron ore resources, renewable energy, and skilled workforce to develop a greener steel industry.
The investment also connects with other government policies, including hydrogen production incentives and critical minerals development. As the sector moves towards decarbonisation, the Green Iron Investment Fund is expected to play a role in shaping Australia’s industrial future while securing employment and economic benefits at home.
