One of Australia’s steelworks facilities should be turned into a green iron and steel hub to lead the worldwide race to decarbonise metals.
But using gas rather than renewable energy to fuel production could undermine its potential and cost the government billions of dollars in subsidies, a report warns.
Clean Energy Finance released the advice about South Australia’s Whyalla Steelworks on Monday from a report endorsed by The Superpower Institute.
It comes after the steelworks was forced into administration in February and received a $2.4 billion rescue package from federal and South Australian governments, including $1.9 billion to invest in its long-term future.
The 56-page report, called A Strategy for Whyalla, investigated potential outcomes for the facility, including its transition into a centre for green iron and steel production.
Green iron is produced using renewable energy resources, such as solar, wind and hydrogen rather than coal or gas and has the potential to cut 90 per cent of emissions from the steelmaking process.
The research found Whyalla well placed to take advantage of South Australia’s high-quality magnetite iron ore deposits and its vast renewable energy supply to produce green metals.
Australia had a rare chance to play a role in the emerging green iron export market, Climate Energy Finance director and co-author Tim Buckley said, if it acted swiftly.
“Green iron is the biggest single opportunity for Australia in the next two decades but it’s probably also the single biggest strategy risk for our country if we don’t get involved and get moving,” he told AAP.
“We should be deploying and developing Australian based technologies and learning by doing.”
The report was highly critical of proposals to use gas rather than renewable energy to reduce iron and steel emissions as an interim measure, however, and estimated gas subsidies would cost taxpayers between $1.7 billion and $2 billion over a decade.
Using gas would also fail to meet green metal standards set by Europe, Mr Buckley said, and could limit its future export potential.
“South Australia has got excellent magnetite resources, they’ve got brilliant renewable energy penetration and they’ve made really good progress on that,” he said.
“Their least competitive advantage is that (they have) some of the highest gas prices in Australia.”
The report issued several recommendations, including re-evaluating the use of gas at Whyalla, developing off-take partnerships for green metals and supporting green hydrogen production.
If governments made smart investments in the facility, The Superpower Institute chief executive Baethan Mullen said, it could provide jobs for decades.
“There is an incredible opportunity for Whyalla to become Australia’s first green iron and steelmaking success story,” he said.
“Government support for a gas option at this point would be a significant misstep.”
The Whyalla steelworks employs about 1100 people, produces iron and steel including rail products and its sale process began in June, overseen by administrator KordaMentha.
https://thewest.com.au/business/mining/embattled-steelworks-should-become-a-green-iron-beacon-c-20698830
