ANU research program on green steel supply chain futures for Australia, China and the region

The challenge

China currently produces around 54% of the world’s steel, largely via the blast furnace route, producing around 65% of global steel-related GHG emissions. 

Australia, currently by far the largest supplier of iron ore to China, also has significant renewable energy resources, enabling it to produce ‘green iron’ to steel producing countries, enabling them to reduce their domestic greenhouse emissions.

However, Australia faces significant competition in being the preferred source of green iron for China, Japan and South Korea, with competition from suppliers in South America, Africa, the Middle East and Brazil. Significant understanding of the technical, commercial and policy characteristics of competitor supply chains is needed to inform the policy intervention required to realise this significant economic opportunity. 

Project aims

This project aims to advance research and outreach to identify and advocate for the technology and policy pathways that will enable the decarbonisation of the steel sector in the Asia-Pacific region. It focuses on creating the conditions for investment that support low-emissions steelmaking, while ensuring decision-makers have access to clear information about the broader environmental and economic implications.

The project also explores the policy settings and industry requirements needed to capitalise on Australia’s comparative advantage in green iron production. A key objective is to support the development of an efficient, cross-border green iron and steel value chain between Australia and China.

Together, these efforts are essential to positioning Australia as a critical partner in the decarbonisation of China’s steel industry.

Activities

Realising the opportunity associated with Australia’s theoretical advantage in green ironmaking: pathways to a decarbonised global iron and steel making industry.

Firstly, this project will identify the potential pathways to a fully decarbonised global iron and steel industry to inform understanding of Australia’s key competitors in the global race to become the preferred supplier of green iron to China, East Asia and Southeast Asia, and policy drivers and industry interventions that would enable the possible and preferred futures identified to be realised.

An Australia-China zero-emissions iron and steel supply chain. 

Secondly, the project will focus on the Australia-China steel value chain, analysing how different value chain configurations will impact key metrics including the final cost of steel products, and environmental and economic indicators such as carbon and local air pollutant emissions, economic growth, policy and regulatory settings, employment, wages, and investment in each country, down to State/ Province level. This information will enable informed considerations both within China and between Australia and China, about potential new industry structures.