Australia may lose $45 bln amid green steel rush, report says

A think tank on Friday said that Australia, the world's largest iron ore exporter, could lose up to half of its revenues from this sector if it does not produce green iron quickly enough. Other countries are now making steel with renewable energy.

Why it's important

Australia's largest export is iron ore, but progress in developing green-iron has been slow.

By the Numbers

According to a Climate Energy Finance report, Australia could lose around A$69 Billion ($45 Billion) in revenue each year as global steelmakers, including those in China, decarbonise and restructure supply chains.

If Australia were to become a leader in the green iron industry, its current revenues could be doubled to A$250 Billion per year.

According to government statistics, Australia accounts for 56% seaborne iron ore commerce.

KEY QUOTES

The report stated that Australia needed "a set of strategic national interest policy and investment incentives" to jumpstart a green export industry.

Marilyne Crestias of Clean Energy Investor Group said, "In the race to green export iron, Australia has many competitive advantages. We must take advantage of them.

What's Next?

BHP Group and Rio Tinto have all started green iron projects. Fortescue will produce green iron at a pilot facility next year.

Climate Energy Finance suggested Australia develop a clean commodities company with South Korea, Japan and that the Future Fund of the Government should provide A$20 Billion to enable green metals.

The report also recommended that Australia's industry bodies work together to develop an Asian Carbon Border-Adjustment Mechanism (ACBAM), which would create a premium for Australian green iron.

(source: Reuters)