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

To undertake research and outreach, focusing on identifying, and advocating for, the technology and policy pathways that will enable industry and policymakers to:

1. create investment environments that will accelerate steel sector decarbonisation in the Asia-Pacific region, with full information about broader environmental and economic implications
2. understand the policy and other requirements to realise the opportunities associated with Australia’s competitive advantage in green iron-making; and 
3. drive the development of an efficient green iron and steel value chain across China and Australia.

These outcomes are necessary pre-conditions to Australia playing a key role in decarbonising China’s steel sector.

Activities

The program is organised along the following tracks: 

Track 1: Realising the opportunity associated with Australia’s theoretical advantage in green ironmaking: pathways to a decarbonised global iron and steel making industry.

This track 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.

Track 2: An Australia-China zero-emissions iron and steel supply chain. 

This track 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. 

Track 3: Industry and policy perspectives: input and insights from key stakeholders.

Track 3 provides multiple functions: (i) gaining stakeholder input and feedback on key assumptions included in Tracks 1 and 2 (ii) amplification and outreach of the results and outputs from Tracks 1 and 2 and (iii) providing specific research outputs via a significant stakeholder survey across both China and Australia . 

Expected outcomes and impact

The outcomes of this project will include: 

• A reset of expectations in policy and industry, especially in Australia and China but also in Japan and South Korea, about the feasibility of full decarbonisation of global steel production by 2060.
• In Australia, a clearer understanding of the long-term prospects of Australia’s iron ore and potential downstream ore processing industry, including economic and environmental implications, and policies and industry interventions that would guide and support the transition.
• A more nuanced understanding by key players about the role that the Australia-China supply chain can have under different scenarios and the impact of different value chain configurations on key environmental and economic indicators.
• In China, greater awareness of the opportunities that importing green iron from Australia could provide in China’s shift to zero emissions steel production as an important part of China’s net zero emissions goal.