Green Iron opportunities in Australia

Annex B. Approach to the case study

This annex discusses in detail the approach taken in the case study. It includes a literature review, followed by an explanation of the methodology used in analysing green iron markets.

An evolving literature on green iron, in particular in Australia

3. Although still at an initial stage, there is a growing body of research on developments in green iron markets, in particular the relocation of green iron production in a climate context (Vogl, Ahman and Nilsson (2018[62]) Gielen et al. (2020[63]) Wilmoth et al. (2024[64]) Verpoort (2024[65]) Samadi et al. (2023[66]) Lopez et al. (2023[67]) Trollip et al. (Trollip, McCall and Bataille, 2022[68]), Devlin et al. (2023[69]) Pimm et al. (2021[70]) Witecka et al. (2023[71]) Rosner et al. (2023[72]) IEEFA (2024[73]), Renewable Energy Institute (2023[74]) Bilici et al. (2024[75]) Devlin et al (2022[76]) Bataille et al. (2024[77]), Karkare and Medinilla (2024[78]), Algers and Bataille (2025[79]). The studies mostly find that green iron production and exports/imports are expected to become a cost effective and central element of steel decarbonisation pathways and supply chains in the near future and that low renewable electricity prices constitute the key driver for green iron production locations and trade, next to favourable policy settings.

4. Among this emerging literature, developments in Australia have by far received the most attention, including through a flurry of reports and papers by universities, think tanks, civil society organisations and industry organisations in Australia itself during 2024. In part, these papers were produced in response to a consultation launched by the Australian Department of Industry, Science and Resources in May 2024 , which called on stakeholders to reflect on green metal opportunities in Australia in line with the industrial policy initiative “A Future made in Australia” launched in April 2024 (Government of Australia, 2025[80]). The Australian Government also commissioned further research, such as a feasibility study by the University of New South Wales on green metals exports from Australia to Germany (Daiyan et al., 2024[8]). The Australian Renewable Energy Agency (ARENA), in cooperation with the Australian National University, CSIRO, and others, also launched a green iron research project in 2024 (ARENA, 2024[81]). Geoscience Australia developed the Green Steel Economic Fairways Mapper as a resource to assess different geographies according to their suitability for green steel/iron production (Haynes et al., 2024[82]) and published research on green iron related supply chain options between Australia and Japan (Wang et al., 2024[83]).

5. State governments, in particularly South Australia, played a role as well in commissioning research (for instance Wang et al. (2024[84])) as well as in launching an expression of interest (EoI) on green iron in June 2024, inviting parties across the steel value chain to come forward with proposals (Government of South Australia, 2024[85]). In Western Australia, the Mineral Research Institute of Western Australia plays a central role in green iron research, for instance through its analysis of five green steel pathways in Western Australia, three of which focus on green iron (Mineral Research Institute of Western Australia, 2023[86]), with a new study on green iron forthcoming.

6. Various Australian universities have set up research programmes on green iron, including Monash University (see for instance Wang et al. (2023[31])), the University of New South Wales (Daiyan et al., 2024[8]), the University of Western Australia (Rhee et al., 2024[87]), the Australian National University and the University of Adelaide. In part, this research was also developed under the umbrella of the Heavy Industry Low-carbon Transition Cooperative Research Centre (HILT-CRC), a collaborative venture that brings together industries, researchers, and government organisations on decarbonisation (Heavy Industry Low-carbon Transition Cooperative Research Centre, 2025[88]), which includes various dedicated research projects on green iron and iron ore.

7. Various think tanks and civil society organisations also prepared green iron reports. The Superpower Institute, an influential not-for-profit organisation “dedicated to helping Australia seize the extraordinary economic opportunities of the post-carbon world” produced a report (Finighan, 2024[7]), that focuses on the new energy trade, and how renewable energy availability in Australia helps pave the way for low carbon intermediate good exports (‘embedded green energy’) from Australia, including green iron. A more recent report by the Superpower institute sets out a comprehensive strategy for establishing Australia as a global leader in green iron production, outlining the economic case, policy actions, and investment priorities needed to unlock industrial decarbonisation and capture new export opportunities (The Superpower Institute, 2025[89]).

8. A study by WWF Australia (Bowen and Wyche, 2024[90]) maps economic opportunities for Australia in green iron production and exports and explores how this can contribute to wider steel decarbonisation efforts in Asian steel producing economies. The study also includes recommendations for policy. (WWF/Deloitte, 2025[91]) argues that it is imperative that the Australian Government positions itself for a rapid transition to green steel-making and that Australia’s economic opportunities from green iron will be determined by the pace of renewable deployment and the scale-up of Asian carbon pricing. A further WWF study looks at green iron developments in South Australia (WWF and Low Carbon Australia, 2024[92]).

9. A report prepared for Greenpeace Australia Pacific (Springmount Advisory, 2024[10]) analyses the potential for green iron production in Western Australia, suggesting three interconnected scenarios starting with green iron production for local steel markets, to then move to exports to Japan, Korea and Chinese Taipei and the People’s Republic of China (hereafter China).

10. A report by Climate Energy Finance (Pollard and Buckley, 2024[6]) suggests that as an early mover in green iron production, Australia could generate AUD 174 billion in Australian exports from value-added iron, and provides policy recommendations to realise this, with an emphasis on policy efforts to strengthen linkages with other economies. The Institute for Energy Economics and Financial Analysis (IEEFA) produced various reports on the topic, (Basirat and Nicolas, 2024[93]) showing both the potential of green iron for Australia as well as the challenges it faces given competition from other countries. A report by Springmount Advisory (Springmount Advisory, 2024[10]) formulates 10 requirements for scaling export-oriented green iron production in Western Australia, including through the establishment of an Australasian Green Iron Corporation. A further study by Accenture (Accenture, 2023[94]) analyses opportunities for Australia in clean exports, including green iron.

11. Finally, various companies and industry organisations have launched or commissioned research on green iron, in part in response to the federal consultation mentioned before and South Australia’s expression of interest1. For instance, a study undertaken by Mandala (Mandala, 2024[95]) for the Chamber of Minerals and Energy Western Australia (CME) underlines green iron opportunities, but also the need for enhanced policy action to realise this.

12. Although the various reports produced differ in focus and methodology, they all lead to similar conclusions. First, they all point at the considerable opportunities for Australia in moving towards green iron production and exports. Second, they underline the need for policy efforts to be intensified, in particular with respect to renewable energy production, hydrogen and trade but also direct support for companies. Third, the studies almost all combine an economic and an emission reduction perspective on Australia’s green iron opportunities, both ‘at home’ and abroad, taking the view that such business and climate objectives are well-aligned. Fourth, with a few exceptions, they take a supply side perspective, focusing on opportunities and challenges in Australia itself, and less on the global market and policy environment in which these opportunities would need to take shape.

Approach and methodology for the case study

13. The added value of this case study on Australia does not lie in providing insights on green iron developments in Australia itself, which has been well-documented in the various studies discussed. Rather, this case study aims to put developments in Australia in an international perspective, not only benchmarking these Australian policies and market developments against developments elsewhere, but also zooming in on (necessary) linkages of Australia with other countries that are essential for the green iron developments in Australia to succeed.

14. With international benchmarking and linkages perspective in mind, the approach taken in this case study is outlined below. Developments in green iron production, investment and trade are approached as the result of strategies and actions undertaken by companies across the steel value chain in terms of their investments, purchases and sales, technology choices and partnerships. The case study focuses on three types of companies in this respect:

• Iron ore miners and producers: These companies traditionally produce and export direct shipping ore to various markets. In the green iron space, they have different options. They may continue exporting ores or start iron ore beneficiation to make their products more suitable for DRI exports, or other technology routes to make iron ore more suitable for steel decarbonisation. Upstream producers may focus on establishing DRI/HBI production themselves and seek markets to sell green iron, or seek partnerships with offtakers in steel production (and/or jointly invest) to produce DRI/HBI there.

• Steel companies: (Integrated) steel companies may consider transforming their BF into DRI themselves, continuing to buy/import ore. Alternatively, they may opt for buying green iron on the market from Australia or elsewhere or enter into partnerships (or invest) in DRI production elsewhere. In other words, they may opt for ‘make’ at home, ‘make’ abroad via foreign direct investment, partnerships, joint ventures or simply buy and import.

• Emerging players: These are typically younger companies that may own a specific technology that is conducive for green iron production. Such companies, often in partnership, will likely seek opportunities to be first-of-a-kind movers in emerging green iron production regions, leveraging technological comparative advantages from that of existing production pathways. They may also license their technologies to others.

15. The approach taken in this case study postulates that the strategies of these three archetypes do not take place in a vacuum but are driven by four main elements:

• Raw material availability: Green iron production requires access to iron ore of relevant quality and price for green iron making. Companies may take advantage of developing green iron production in proximity to suitable green iron resources or at locations where imports of green iron ore are feasible at competitive costs.

• Renewable energy: Green iron production requires access to sufficient and competitively priced supply of renewable energy. As the emerging literature shows, such availability of renewable energy is a key factor in location decisions by companies on green iron production. Countries/companies may also opt for importing renewable energy, for instance in the form of hydrogen, but it is widely considered that seaborne hydrogen will not be cost-competitive due to losses in energy at the points of liquification and re-gassification.

• Demand considerations: Green iron production requires sufficient current and future demand for green iron, as well as the necessary infrastructure to transport green iron to customers. A key factor within company strategies towards green iron production and its location is therefore the question if and where customers can be found for the green iron produced.

• Policy setting: The literature clearly shows that green iron production requires a supportive policy environment. However, countries at different positions along the steel value chain may take different policy approaches and may compete to attract green iron production and/or directly or indirectly favour or discourage green iron imports, exports and investment. Company choices on the location of green iron production are influenced by this variety in policy settings across countries.

Each of these four elements is crucial for better understanding the strategies companies undertake in the green iron space and the future directions of green iron production and trade globally. The paper will discuss green iron production and trade and the company strategies underlying this, as well as the four factors that drive this, from an Australian perspective, against the background of how these developments work out globally.

Note

← 1.  See for instance ZEN Energy (2025[97]).