This section discusses developments in green iron markets from the perspective of the four key factors that drive these: raw material availability, access to raw materials, demand considerations and policy settings. For each of these drivers, the section first discusses global aspects and then zooms in on Australia.
Green Iron opportunities in Australia
A case study within the OECD’s Global Green Iron project
The iron ore market is a global market, with largest production and exports from Australia and Brazil. Australian exports go primarily to China and other Asian countries
The iron ore market is inherently global, with Australia and Brazil as the two dominant producers and exporters (Figure 7). Australia leads the world in iron ore production, primarily from significant mining operations in the Pilbara region of Western Australia. Most of Australia's iron ore exports are directed to China, the world's largest steel producer, followed by Japan and Korea, both of which depend on Australian supply to sustain their steel industries (Table 1).
Brazil is the second-largest iron ore producer, with vast reserves in the Carajás and Minas Gerais regions. The country's iron ore, predominantly controlled by Vale, is known for its high iron content and low impurities. Brazil’s exports are also largely destined for China, but European and Middle Eastern markets play an important role as well.
Source: Production figures are obtained from the US geological Survey, whereas trade data are obtained from ISSB.
Beyond these dominant players, other iron ore-producing countries play crucial roles in regional markets.
South Africa, for instance, is a significant exporter to China and India, with its iron ore mainly extracted in the Northern Cape region. While its production volumes are much smaller than those of Australia and Brazil, South Africa's mines benefit from well-established transport infrastructure linking them to deep-water ports.
Canada also plays an important role in the global iron ore market, particularly as a supplier of high-grade iron ore to North America, Europe, and increasingly Asia. The country’s iron ore production is concentrated in the Labrador Trough, spanning parts of Quebec, Newfoundland and Labrador. Canadian producers such as Iron Ore Company of Canada (IOC), owned by Rio Tinto, and Champion Iron focus on premium-quality iron ore with a high iron content and low impurities. The country's strategic location provides logistical advantages for supplying European steelmakers, and its stable regulatory environment makes it an attractive destination for long-term investments in iron ore mining.
In this landscape, new projects are emerging in certain areas, in particular Africa, with the potential to change the geography of iron ore trade. The Simandou project in Guinea, a vast, untapped deposit, holds some of the highest-grade iron ore reserves in the world, estimated at around 1.5 billion tonnes (Rio Tinto, 2024[28]). If successfully developed, Simandou could disrupt the current market balance by introducing a new major supplier, partially reducing China’s dependence on Australia and Brazil. The project’s success depends on overcoming significant logistical and infrastructure hurdles, including the construction of a 600-kilometre railway and a deep-water port for exports. If these challenges are met, Simandou could diversify the global iron ore supply, intensify competition, and influence iron ore pricing dynamics over the coming decades.
Source: Authors’ elaboration based on ISSB data.
Australian iron ore production is concentrated in the Pilbara, but with significant production elsewhere
Australia’s iron ore production is geographically concentrated, primarily in the Pilbara region of Western Australia (Figure 9). Hematite ores represent the majority of Australian resources (58%) but magnetite reserves are also significant (41%). Large magnetite production is in fact being proposed outside the Pilbara, particularly in South Australia (Table 2) which has significant deposits. Hematite ore is typically higher-grade than magnetite ore, with approximately 60% contained iron whereas magnetite ore has grades in the order of 30% contained iron. However, magnetite is often considered a more efficient product to beneficiate compared to hematite due to its physical and chemical properties despite typically having lower iron grades. Furthermore, magnetite’s magnetic properties make it easier to process through magnetic separation techniques, a highly efficient and cost-effective beneficiation method. In contrast, hematite, being non-magnetic, often requires gravity separation or flotation processes, which are more complex and energy-intensive.
Note: EDR=Economic Demonstrated Resources, Total Resource=EDR + Subeconomic Resources +Inferred Resources. NSW = New South Wales; NT = Northern Territory; QLD = Queensland; SA = South Australia; TAS = Tasmania; VIC = Victoria; WA = Western Australia. Average grade is prior to beneficiation and estimated by dividing total contained iron by total iron ore tonnage.
Source: Australia Minerals, Australian Magnetite Ore 2023 Factsheet.
Iron ore differs in quality and iron content, with only some qualities usable for DRI.
Hematite ores can also be upgraded through beneficiation processes, increasing their iron content and suitability for decarbonised ironmaking. Technologies such as pelletising, sintering, and agglomeration can enhance the usability of hematite for DRI production and other low-carbon steelmaking methods. These processes could allow hematite resources to remain relevant in the green transition, particularly if the industry prioritises value-added beneficiation to meet evolving market needs.
Availability of magnetite is a location factor for green iron production in Australia, but new ironmaking technologies may make hematite relevant too
Availability of iron ore for green iron production is a clear advantageous location factor for green iron production in Australia. This regards magnetite but the potential for hematite beneficiation means that iron ore type alone will not necessarily dictate the geography of green iron investments. Hematite beneficiation is particularly relevant in the short to medium term, as many of the major Australian iron ore companies operate on vast hematite resources. These large players have the financial capacity to drive early investments in low-carbon ironmaking technologies, potentially accelerating the transition. By improving beneficiation techniques, hematite could become more viable for use in DRI/HBI processes, strengthening Australia’s position in the green iron value chain.
Improvements in the beneficiation of low-grade iron ores are progressing rapidly along with the development of new technologies. These include, for instance, the recent announcement of the so-called flash ironmaking technology, a process developed by Chinese researchers, capable of boosting ironmaking efficiency by up to 3,600 times (South East Asia Iron and Steel Institute, 2024[29]). While these technologies may offer an additional opportunity for Australian companies to greening and adding value to their iron ore production, they raise obvious considerations on whether an improved technology may change the low/high value added iron trade prospects for Australia. At the same time, given the size of both magnetite and hematite resources in Australia, there is likely room for both a magnetite-green iron production route and a hematite-benefication route, without resource availability being a constraining factor or raw material availability being leading to competition between the two routes.
The availability of renewable energy is a key locational factor for green iron production, with renewable energy production expected to grow across regions
Between 2025 and 2030, global renewable capacity is set to grow from about 6 thousand GW to almost 10 thousand GW, reflecting a 74.5% increase. Asia's renewable capacity is projected to rise by 68% in 2025-30 period — one of the strongest growth rates worldwide, driven by continued industrial demand and policy support. Europe and the Americas will also see their capacity expand, although the most striking growth is observed in MENA, where renewable capacity is expected to more than double by 2030, from 68 GW in 2025 to 149 GW in 2030, suggesting a rapid acceleration in the region’s renewable energy deployment. Australia’s renewable energy capacity is also advancing fast: in 2030, the cumulative capacity of the country is estimated to reach 110 GW, well above current levels (63.5 GW) (see Figure 8).
Source: (IEA, 2024[30]).
The necessity of islanded renewable energy systems for green iron production means that renewable resource availability and energy system design become decisive location factors.
Australia is experiencing rapid growth in installed renewable energy capacity, with large-scale solar and wind projects increasingly populating the national landscape. However, the transition to green iron production poses a unique challenge. Unlike conventional manufacturing or grid-connected industries in southeastern Australia, prospective green iron projects in regions like the Pilbara will not be able to rely on the national electricity transmission network. In the absence of adequate grid infrastructure in the country, such projects will necessarily depend on islanded renewable energy systems—self-sufficient, off-grid power solutions that co-locate generation and demand.
This requirement introduces a distinctive set of challenges and opportunities from both economic and policy standpoints. On the opportunity side, co-locating renewable energy generation (e.g. solar and wind farms), hydrogen electrolysers, and downstream ironmaking facilities can provide highly integrated industrial ecosystems. These setups can deliver energy self-sufficiency, avoid reliance on long-distance grid connections, and support a phased development model aligned with demand growth and investment cycles. In effect, each project becomes a miniature, self-contained energy ecosystem capable of scaling over time.
Such systems also offer strategic benefits: they encourage industrial clustering in resource-rich areas and reduce exposure to national grid congestion or fluctuating electricity prices. Australia has a clear comparative advantage here, particularly in the Pilbara, where significant iron ore reserves coincide with some of the country’s highest solar irradiance and wind potential. The co-location of mining and energy assets could significantly lower raw material transportation costs while also shortening supply chains for low-emission steel products (Wang et al., 2023[31]). This approach would also significantly reduce the costs associated with long-distance hydrogen transportation and extensive, long-term hydrogen storage.
Wang et al. (2023[31]) look at two distinct regions, the Pilbara and the Eyre region and find that the cost-optimal design of the system is largely driven by technology costs, plant operational constraints, and local renewable variability. The modelling results illustrate how an optimised mix of wind and solar can significantly reduce energy storage requirements and decrease the cost of green steel production overall.
However, the economic and technical barriers to islanded systems are substantial. Building stand-alone renewable and storage infrastructure — especially at the scale required for continuous iron and steel industrial operations — is significantly more expensive than leveraging an existing transmission network. Industrial processes such as DRI production and EAF steelmaking require consistent, high-quality power inputs. Managing intermittency in off-grid contexts thus requires oversized battery installations, hydrogen storage solutions, or backup generation — each of which adds to capital costs and operational complexity.
Moreover, the absence of a grid backbone means that each project must independently address issues such as system stability, power quality, and redundancy. This isolation results in lost economies of scale, as developers cannot share infrastructure or draw on balancing services provided by interconnected systems. The technical and financial risks are therefore higher for first movers, particularly in remote or climatically extreme environments.
These dynamics suggest that green iron production in Australia is unlikely to be evenly distributed geographically. Rather, it will tend to concentrate in specific industrial precincts where conditions are favourable for the development of economically viable islanded energy systems. Areas like Port Hedland stand out as natural candidates. They combine proximity to iron ore deposits, export infrastructure, land availability, and renewable energy resources. The prospect of spatial concentration raises the case for targeted public investment in enabling infrastructure — shared desalination plants, hydrogen storage hubs, high-capacity microgrids, and port facilities — designed to lower barriers for industry entrants and accelerate scaling.
Natural gas can be a valid alternative for speeding up green iron investments in Australia but gas-based ironmaking can only be seen as a transitional pathway while the necessary infrastructure for green iron scales up
It must be considered that the cost-effective provision of necessary power in such zones remains a fundamental challenge. Unless long-duration storage technologies or hybrid generation systems become significantly more affordable, many green iron projects may face high marginal electricity costs. Natural gas is currently the most commercially mature reductant for supporting value-added ironmaking in Australia, particularly given the existing network of gas pipelines and the domestic availability of the resource. However, high domestic gas prices and potential supply constraints undermine its long-term viability (Nicholas, 2025[32]). Reliance on natural gas could also erode Australia’s competitiveness in global green iron markets, particularly when compared to regions with access to cheaper gas or more advanced clean hydrogen infrastructure. Taken together, these factors position gas-based ironmaking in Australia only as a transitional pathway while the necessary infrastructure for green hydrogen scales up.
MENA, for instance, stands out for its strong projected hydrogen capacity, but its ability to translate this into green iron production will hinge on its capacity to fully integrate current gas-based infrastructure with large-scale green iron industrial facilities and supply chains (Basirat, 2024[24]). Europe, despite having lower dedicated hydrogen capacity, benefits from existing industrial clusters and policy frameworks that could ensure more efficient use of available resources.
Source: (Wang et al., 2023[31]).
Demand factors are a further important driver of green iron production, investment and trade
Demand developments in the wider steel market are a driver for (green) iron production, trade and investment. The ability of iron and steel producers to transition to green iron will crucially depend on whether demand factors will make iron intermediate products such as DRI and HBI a profitable alternative in the near future. These include demand considerations like the increasing role played by carbon-related trade measures and more broadly the proliferation of decarbonisation policies that will likely have an impact on DRI/HBI demand. But also wider demand considerations regarding the steel sector, which is clearly the most prominent iron using sector.
The demand for green iron will be closely linked to global steel consumption trends, which are shaped by broader economic and industrial dynamics. Economic growth, infrastructure development, and urbanisation drive steel demand, while structural shifts in industries such as construction, automotive, and manufacturing can influence long-term consumption patterns. Additionally, the increasing use of alternative materials, such as aluminium, may partially replace steel in certain applications, affecting the overall need for iron-based inputs. Any fluctuations in these factors will have direct implications for the scale and stability of demand for green iron.
The implementation of decarbonisation policies, including carbon pricing mechanisms, emissions reduction targets, and green public procurement policies will likely accelerate the transition to low-emission steelmaking. At the same time, consumer preferences and investor pressures are driving companies to align with sustainability goals, reinforcing the need for cleaner production inputs.
The expansion of EAF steelmaking represents another major factor influencing demand for green iron. EAF production relies primarily on scrap steel, but the availability and quality of scrap vary by region, leading to an increasing need for alternative iron inputs. As more steelmakers transition away from traditional coal-based ironmaking processes, the role of green iron in complementing scrap-based production is expected to grow.
Trade policy measures, which can also reflect the willingness of countries/industries to import green iron products, can also shape demand for green iron. Additionally, companies seeking to lower their scope 3 emissions -- those arising from their supply chains — may prioritise sourcing low-carbon iron inputs, reinforcing the role of green iron in global steel supply networks.
Finally, cost competitiveness will determine the viability of green iron relative to alternative sources. The affordability of renewable energy, production efficiency, and transportation costs will all impact pricing dynamics, influencing buyers’ willingness to adopt green iron over conventional iron products. Furthermore, competition from other emerging green iron producers will contribute shaping global supply chains, as different regions position themselves as key suppliers.
Demand developments for green iron in Australia and elsewhere depend on several factors: first, it is expected to be related to steel demand in key markets such as Japan and Korea
The dynamics of steel demand in the medium term, in particular in countries exposed to imports of iron products from Australia, provide a good basis for better understanding the future demand for iron intermediate products and, in turn, for green iron production and investments. Nearly all iron ore production and its main derivative products are used in the steel industry, making the prosperity of the iron sector intimately related to the global dynamics of the steel sector.1
OECD analysis shows that global demand for steel is projected to grow moderately or stay flat in the long term (OECD, 2025[33]). Regional heterogeneity exists across major steelmaking countries: China’s demand is expected to peak before 2030 and then moderately decrease towards 2050. Demand for steel in other key Australian iron ore export destinations, such as Korea and Japan, is projected to remain stable or slightly decline in the longer term. Conversely, other important markets for Australian iron ore exports including India and ASEAN countries will face increasing demand for steel.
Given this scenario, the crucial question is how these demand configurations will translate into the uptake of low-carbon iron products such as DRI and HBI and in turn what share of this demand will prioritise green DRI/HBI products in the future. While markets like Korea and Japan are expected to maintain steady steel demand, the pace of their transition towards low-emission ironmaking technologies remains uncertain. At the same time, rising steel demand in India and ASEAN countries presents an opportunity for expanding the market for DRI/HBI.
Note: Apparent steel consumption, projections from 2020 to 2050 in million tonnes. Selected economies.
Source: OECD calculations.
A growing share of steel demand will need to be near zero emissions to reach Paris objectives. Green iron will be one of the routes via which this greening of steel demand may take place, alongside others.
A growing share of steel demand will need to be near zero to reach Paris objectives. Therefore, the demand for green iron depends on steel decarbonisation efforts and policies, which help put a premium on DRI production and in turn on green iron
The demand for low-carbon iron intermediate products produced in Australia will be heavily influenced by the decarbonisation policies adopted in key export markets. As two of the largest importers of Australian iron ore, Japan and Korea are also potential importers of DRI/HBI if they accelerate their transition to low-carbon steelmaking. The extent to which Korea and Japan implement stringent carbon reduction policies—such as higher carbon pricing, stricter emissions targets for the steel sector, or direct incentives for low-carbon material sourcing—will be a critical factor in shaping demand for Australian-produced low-carbon iron. For example, in early 2025, Japan’s Ministry of Economy, Trade and Industry (METI) introduced a subsidy of 50,000 yen (USD 330) for clean energy vehicles built with low-emission steel. A proliferation of such incentives could push Japanese steelmakers to look overseas for green HBI to feed their steelmaking operations (Russel, 2025[34]).
If these policies create strong incentives for steelmakers to replace traditional iron inputs with low-carbon alternatives, Australia’s role as a supplier of green DRI/HBI could expand significantly. Conversely, if Korea and Japan opt for less ambitious decarbonisation pathways, prioritise alternative low-carbon technologies or would aim for greening iron production ‘at home’, demand for Australian low-carbon iron products may remain limited.
Beyond the direct policies of Korea and Japan, the further advancement of carbon border adjustment mechanisms in the regions that import steel from these two nations could further drive demand for low-carbon iron products from Australia. If major steel-consuming regions - such as the European Union (hereafter the EU) or the US - enforce stringent carbon border policies, export-oriented Korean and Japanese steelmakers will face growing pressure to decarbonise their supply chains to maintain access to these markets. This could create an indirect but powerful incentive for them to source low-carbon iron inputs, including green DRI/HBI from Australia, to ensure compliance with global carbon regulations and maintain their competitive position in export markets.
In addition, as argued by (Pollard and Buckley, 2024[6]), an Asian CBAM including major Asian partners and Australia would play a crucial role in shaping the investment decisions of Australian mining majors by:
Sending a strong and predictable price signal that aligns with global decarbonisation trends: given Australia's historical reliance on fossil fuel exports, such a mechanism would encourage a shift toward low-carbon, value-added production in critical minerals and strategic metals.
Providing the regulatory certainty needed to scale up these investments, fostering a more sustainable and competitive position in global markets while reducing exposure to carbon-intensive trade risks.
Integrating embodied low-carbon incentives into exports: Australian iron ore producers like BHP and Rio Tinto would be increasingly incentivised to accelerate investments in greener mining operations and downstream processing.
Green iron will be one of various routes via which this greening of steel demand will take place
Beyond green iron, there are various alternatives that can be explored to decarbonise the steel industry. The most prominent one is a larger use of scrap into EAF furnaces to produce steel. Various net-zero scenarios for the steel sector indicate the share of scrap input in steel manufacturing increasing globally to around 45-50% by 2050 to comply with the goals of the Paris Agreement. According to the OECD, this share could be even higher depending on the deployment of new recycling technologies for scrap collection, sorting, and processing, as well as increasing economic incentives to recycle (OECD, 2024[35]). The extent to which the scrap route will affect green iron developments in Australia will mostly depend on the availability of scrap worldwide, which in turn depend on the ability of countries, which possess large inventories of this material, to make if available on international markets and the stringency of policy barriers to trade.
Transportation and logistics costs will also play a role in how green iron demand unfolds
Transportation costs may also play a role in determining green iron demand and production and trade patterns. These costs may both play a role as a component of the competitive position of Australia’s green iron relative to other producing regions, as well as in relation to considerations for Australian firms to move towards the green space.
A first factor regards the share of transportation costs in the export price of Australian green iron compared to its competitors. Studies suggest that such costs are a relatively small component of total production costs and would not disadvantage Australian green iron producers (see Figure 11). This may in particular be the case for markets in the Asian region with well-developed trading relations with Australia and infrastructure for trade. In markets further away, such as in Europe, these cost factors may weigh heavier, providing an advantage for competitors from MENA for instance.
Source: (Wilmoth et al., 2024[36])
Another factor influencing transportation economics is the difference in shipping costs between DRI/HBI and iron ore. While bulk iron ores, such as hematite and magnetite, are transported via standard dry bulk carriers with well-established logistics, shipping DRI and HBI is more expensive on a per-unit iron (Fe) content basis. This is because DRI and HBI require specialised container ships due to their reactivity and potential safety risks. Unlike iron ore, which is chemically stable and can be transported with minimal handling considerations, DRI is highly reactive towards oxygen and moisture, posing a risk of spontaneous combustion if not properly handled.
Beyond direct shipping costs, a successful transition to green iron trade requires investments in Australia’s port and storage infrastructure. While Australia’s iron ore export terminals are among the most efficient in the world, they are primarily designed for high-volume, low-value bulk handling. DRI/HBI, however, require specialised storage facilities to mitigate fire hazards and oxidation risks, as mentioned above. The current lack of dedicated infrastructure for handling these products at Australian ports poses a bottleneck for scaling up green iron exports. Investments will be needed in purpose-built storage areas with inert gas blanketing systems, controlled-atmosphere transport solutions, and updated safety protocols for loading and unloading (International Iron Metallics Association, 2019[37]). In addition, the relatively low volumes of DRI/HBI trade expected compared to usual iron ore trade may not necessarily be able to compensate the required investments in port infrastructure and logistics.
Finally, the broader trade infrastructure for green iron will need to evolve to support more sophisticated supply chain coordination. Unlike iron ore shipments, which follow well-established, high-frequency bulk transport routes, DRI/HBI exports will require more customised logistics solutions. This includes reevaluating the suitability of existing shipping routes, ensuring that receiving ports in key markets—such as Japan, Korea, and Southeast Asia more broadly - are equipped to handle these products safely and efficiently.
The global steel decarbonisation policy context
The global push for steel decarbonisation has gained momentum, with governments and industry players recognising the sector’s role in meeting climate goals. Recent OECD research across 11 jurisdictions and 87 steel decarbonisation policies shows a gradual rise in such policies since 2000, with a sharp increase from 2018 (OECD, 2024[38]). Policymakers primarily rely on broad, non-technology-specific measures, while hydrogen-focused policies are the second most common, followed by policies towards energy efficiency and scrap. This reflects gradual but growing support for low-emission hydrogen-based steelmaking as the focus of policy momentum.
However, policies explicitly targeting green iron remain rare and geographically limited. One reason for this is that most general decarbonisation policies frame the transition within the larger push to reduce emissions across entire industrial sectors. This likely reflects two key structural factors:
Focus on upstream portions of the value chain over process-specific policies: Many steel decarbonisation policies prioritise broader enabling factors such as renewable energy expansion or green hydrogen production. Since these inputs serve multiple industrial applications beyond just green iron, such as chemicals, transportation, governments tend to structure incentives around renewables and hydrogen rather than focusing narrowly on ironmaking itself. This indirect approach aims to create favourable conditions for multiple industries to decarbonise rather than prescribing solutions for specific subsectors.
The role of hydrogen policies in shaping green iron investment: While Australia is the only economy with a dedicated policy focus on green iron, many countries worldwide have implemented policies covering hydrogen, and several of these explicitly target steel. As hydrogen-based steelmaking emerges as a key pathway for decarbonisation, these policies could serve as an important enabler of green iron in the future.
Australia's net-zero ambitions
The Australian federal government committed to achieving net zero emissions by 2050, an ambitious target for a nation historically reliant on fossil fuel exports. Australia is well placed to meet this goal, thanks to its abundant wind and solar resources, which position the country as a global leader in renewable energy potential. However, despite these advantages, as indicated in the 2023 OECD Economic Survey on Australia (OECD, 2023), further reforms are required to meet emission reduction goals. For instance, Australia has less than other countries moved forward to implement a carbon pricing system, which could further incentivise the transition to a low-carbon economy.
In pursuit of its net-zero emissions target by 2050, Australia has implemented the Safeguard Mechanism, a policy designed to limit greenhouse gas emissions from the nation's largest industrial facilities. 2 Established in 2016 and reformed in 2023, this mechanism sets legislated baselines - emission limits - for facilities emitting over 100,000 tonnes of CO2 equivalent annually, encompassing sectors such as mining, oil and gas production, manufacturing, transport, and waste management. Facilities exceeding their baselines must manage excess emissions, through the purchase and surrender of Australian Carbon Credit Units (ACCUs), applications for multi-year monitoring periods, borrowing from future baselines or implementing on-site abatement strategies.
The mechanism allows facilities that reduce their emissions below their baseline to earn credits. Facilities that are both emissions-intensive and trade-exposed (trade-exposed, baseline adjusted (TEBA) facilities) are provided a reduced annual baseline reduction factor, from 4.9% Safeguard benchmark to 1% for TEBA facilities. TEBA facilities are also eligible to access the AUD 1.9 billion Powering the Regions Fund (PRF). Within the PRF, the Government will help trade-exposed Safeguard facilities invest in low emissions technology through the AUD 600 million Safeguard Transformation Stream. It will also support industries that provide essential inputs for renewable energy industries (including steel, cement, lime, aluminium and alumina) through the AUD 400 million Critical Inputs Fund (OECD, 2023[1]). Within this cap, companies purchase or receive allowances, which can be traded on the market.
The Safeguard Mechanism contrasts significantly with the EU's Emissions Trading System (ETS). The EU ETS operates as a cap-and-trade system, setting a total cap on emissions from facilities emitting more than 25,000 tonnes of CO2-equivalent per year. Compared to the EU ETS, Australia's Safeguard Mechanism is less comprehensive in scope and lacks the same market-driven flexibility and scale. While the EU ETS imposes a direct economic cost on emissions through auctioning of allowances, the Safeguard Mechanism relies on setting declining baselines and offering companies options to purchase carbon credits, which may not generate the same financial pressure to innovate or reduce emissions.
Government green iron ambition
In recent years, the Australian government, on both federal and state levels, has put significant focus on green iron, most recently in its announcement of an AUD 1 billion Green Iron Investment Fund. Awareness of the economic opportunity that such a downstream industry could bring to multiple parts of the country reaches many different streams of government action and communications.
The federal government’s recently passed Future Made in Australia (FMIA) agenda provides the policy framework for much of the country’s green metal ambitions, and marks a turning point in the country’s attitude towards industrial policy. While the FMIA plan targets manufacturing and industry in general, the focus on the green iron opportunity is overt, and the plan officially identifies green metals (production of low emissions iron, steel, alumina and aluminum) as one of the priority industries. In conjunction, the Australian federal government announced plans to invest in green metal production as part of the 2024-25 May Budget, after having published a consultation paper at the end of 2024 (Australian government, Department of Industry, Science and Resources, 2024[39]). The federal government has also put together a green metals expert panel to guide its strategy (Minister for Industry and Science, 2024[40]).
Two state governments also have clear and pronounced ambitions regarding green iron production. The South Australian government has a published green iron strategy, while Western Australian Government has a Renewable Hydrogen Strategy and Roadmap (released in 2019, updated in 2021 and refresh in 2024) that has a strong focus on producing green iron. The Western Australian government’s Made in WA election commitment in 2025 is to work with industry on a Green Iron and Steel Action Plan to activate green and low emission downstream processing of WA iron ore.
The South Australian government has significant ambition and drive regarding green iron production. Since 2022, as part of its green iron and steel strategy, the state has established a highly supportive policy structure to boost its chances of successfully producing green iron in the areas around the Spencer Gulf.
The Western Australian economy and corresponding policy landscape is unique, with policy support for green iron production less specifically developed than its ambitions in green hydrogen production. The State Agreements, established between the Western Australia government and mining companies operating there, oblige the companies to research and develop secondary processing facilities within the state where possible, often through the requirement to establish a metallised agglomerate plant. Historically, State Agreement companies have deferred secondary obligations due to a cited lack of economic viability. However, State Agreements also enable companies to seek approval to offset their secondary processing requirements through an alternative project that represents approximately equivalent value to its secondary processing obligations. This can act as an incentive for companies to establish green iron production facilities in Western Australia as a means of meeting their secondary processing obligations through an alternative project.
The Western Australian government is supportive of ambitions in green iron production and is investing in green steel manufacturing in various parts of the state: the Pilbara, the Mid-West, and in and around Collie. Nevertheless, the business structure and favourable market conditions faced by the iron ore mining companies that are active in the Pilbara are such that a significant shift to green iron production is ljkely to require collaboration with a range of partners, including companies from abroad.
Both the federal and state governments are undertaking further specific policy measures to support green iron. At the time of writing this report, following the recent placement of the Whyalla steel mill and related assets into administration, the federal and South Australian governments announced a comprehensive investment package worth AUD 2.4 billion to save Whyalla Steelworks, support local jobs and encourage investment into Australian made iron and steel (Prime Minister of Australia, 2025[41]). The package includes AUD 384 million to fund its operations during administration, AUD 1.9 billion for upgrades and new infrastructure (including the AUD 500 million mentioned above from the Green Iron Investment Fund), as well as AUD 100 million immediate support for the local community (Pollard and Buckley, 2025[42]).
In the related press release, the government emphasised the strategic importance of Whyalla steel plant for future green steel production, which provides an indication of the government’s ambition in this regard. The decision was accompanied by an announcement from the federal government of a Green Iron Investment Fund worth AUD 1 billion to support early mover green iron projects. Up to AUD 500 million from this fund has been earmarked for the Whyalla steelworks transformation, while the other half remains open for both existing facilities wanting to transition into green iron production, and newcomers (Prime Minister of Australia, 2025[43]).
In the context of the FMIA framework, the AUD 750 million Innovation Fund will provide grants for the deployment of innovative technologies and facilities linked directly to priority industries, of which green iron is identified through the green metals prioritisation (Department of Industry Science and Resources, 2025[44]). Similarly, the National Reconstruction Fund (NRF) will provide finance in the form of debt, equity and guarantees to drive Australian-based investments in a number of priority areas. Up to AUD 5 billion of the NRF has been earmarked for investment in low-emissions technologies, with a further AUD 1 billion set aside for value adding in resources. The FMIA package has also expanded the scope of the existing National Interest Account to provide additional avenues for financing projects deemed of high national interest, including in green metals.
Additionally, the federal government has provided AUD 39 million to the HILT-CRC to fund research and development into technologies that de-risk decarbonisation in iron and steelmaking, including a number of research projects relating to DRI and beneficiation technologies.
The South Australian government committed AUD 50 million towards the installation of a low-emission electric arc furnace at Whyalla Steelworks and increased capacity, accompanied by AUD 63.2 million from the federal government. However, this support has been superseded by the announcement of a AUD 2.4 billion package from the federal and state governments. In parallel, the state government opened an Expression of Interest process to support their ambitions for a 2.5 Mtpa hydrogen-based direct reduction iron plant in South Australia by 2030 or earlier. The EoI will allow the government to compare the viability of prospective projects and evaluate risks and opportunities, and proceed with a commercial study that will determine specialised industrial precincts accompanied by strategic planning to de-risk green iron investments.
The Western Australian government has established a AUD 1 billion dollar Strategic Industries Fund to unlock Western Australia's strategic industrial areas (SIAs) and pave the way for WA to become a global clean energy powerhouse. The recently released Made in Western Australia plan has identified the Boodarie Strategic Industrial Area, located in the Pilbara, as a Green Iron Hub, which will help inform precinct planning for this SIA.
The Western Australian government is actively supporting green energy and metals opportunities. The state government aims to ensure there is a coordinated approach to deliver green iron and steel projects with enabling infrastructure. Other prospective areas include Collie and the Mid West, which has significant renewable energy potential, and is subject to interest from multiple companies with aspirations to product green and low emissions metals. For example, a high voltage transmission line connecting the Oakajee to the Southwest Interconnected System (SWIS) will be needed for the implementation of any green iron projects in the area.
The Western Australian government also provided AUD 75 million for the Neosmelt Project (BlueScope, Rio Tinto and BHP), AUD 15 million for the Port Hedland Iron Project (POSCO) and AUD 2 million to Christmas Creek Green Iron Demonstration Plant (Fortescue) in order to support development of enabling infrastructure and technology learnings that may spill over to other companies.
Government support and tax incentives for hydrogen and renewable energy
Federal level
Public investment and incentives for renewable hydrogen production and renewable energy generation, which are key enablers of green iron production, have gained momentum recently in Australia in the 2024 Federal budget and through the FMIA framework.
Energy-related policies are largely established at a state level in Australia, but there are some broader federal policies helping coordinate a transition to more renewables. The creation of Renewable Energy Zones, for example, is a key way for the federal government to coordinate the development of hotspots for renewable energy generation, and is particularly useful for industry. The Powering Australia plan includes key targets and strategies to boost renewable energy generation, while the National Hydrogen Strategy sets out the country’s plan to become a major global player in hydrogen production by 2030 (Department of Climate Change, Energy, the Environment and Water, 2024[45]).
The Hydrogen Production Tax Incentive (HPTI) introduced by the federal government in the 2024-2025 budget marks a significant change in the country’s industrial policy approach. The HPTI will be delivered through Australia’s tax system as a refundable tax offset, providing an AUD 2 incentive per kilogram of renewable hydrogen to eligible producers for up to 10 years, between 1 July 2027 and 30 June 2040.
In parallel, AUD 4 billion was announced by the federal government in the form of the Hydrogen Headstart program, to provide support for large-scale renewable hydrogen projects through competitive hydrogen production contracts. The program uses a competitive process to select large Australian-based projects, focusing on those producing hydrogen or derivates from renewable energy. Selected projects will receive the funding as a production credit, valued at the difference between the production cost and that of the prevailing market price. Producers that receive the HPTI and are awarded contracts under the Headstart program receive reduced effective credits from the Headstart program.
South Australia
The government of South Australia has been pursuing ambitious renewable energy targets since 2008.
Their current electricity mix is almost 80% renewables, and they aim to achieve 100% by 2027. A current pipeline of more than 55 projects could add a further 15.3 GW of renewable energy to help them achieve their target. South Australia has a concrete advantage in their development of renewable energy compared to Western Australia, for example, in their connection to the National Electricity Market.
South Australia was also the first state to seriously explore green hydrogen opportunities, and clearly included hydrogen as a key part of its energy transition plan as early as 2016.
The state government announced investment of more than AUD 500 million in new hydrogen projects according to their hydrogen strategy, however some of this support has been redirected to the salvage package for the Whyalla steelworks. Other hydrogen support includes:
AGIG Hydrogen Park South Australia: an AUD 14.5 million demonstration project comprising a 1.25 MW electrolyser at the Tonsley Innovation District
Hydrogen Hub at Port Bonython: a multi-user export precinct support by AUD 100 million from state and federal governments (and industry a further AUD 40 million), and proposed projects representing around AUD 13 billion investment, with potential for 1.8 Mtpa of hydrogen by 2030.
Western Australia
Western Australia has had high ambitions for hydrogen production for a number of years and explicitly aims to become the country’s largest exporter of hydrogen products.
The state’s Renewable Hydrogen Strategy 2024–2030 outlines its vision to establish an offtake agreement for green hydrogen export by 2030 and secure significant investment in supporting infrastructure to commence large-scale production. The strategy also includes a target that a project is approved for large scale use of renewable hydrogen in green metals or green ammonia by 2028 and WA is prioritising the highest impact end-uses of renewable hydrogen in hard-to-abate sectors. To achieve these aims, the state plans to:
Invest in infrastructure and activation of hydrogen hubs in Kwinana, and the Pilbara, South West and the Mid West region.
Target financial support for selected projects
Accelerate project approvals and enhance social license.
The Western Australian government is strengthening international partnerships by exploring renewable energy supply chain operations with existing and new trade partners.
A trilateral international study between the Western Australian government, Port of Rotterdam and the German Federal Minister for Education and Research is exploring ways to fast-track hydrogen and/or ammonia exports from Oakajee in the Mid-West. Memoranda of understanding (MoUs) to promote collaboration have been signed between the state government and the Japan Bank for International Cooperation on minerals, energy and natural resources and the Japan Oil, Gas and Metals National Corporation on energy and decarbonisation and Republic of Korea’s Ministry of Trade, Industry and Energy (MOTIE) regarding clean energy development and minerals. An MOU was signed between Pilbara Ports Authority and Japan’s Port of Himeji on hydrogen and ammonia.
The OECD recently analysed government hydrogen policies across 18 jurisdictions to assess their role in supporting green hydrogen adoption and steel sector decarbonisation (OECD, 2025[5]). The study covered regions including North and Latin America, the EU, Other Europe, CIS, MENA, and Asia-Pacific.
All 18 jurisdictions have national hydrogen strategies, which take a broad, cross-sectoral approach rather than focusing on specific industries. In many circumstances, these policies identify hydrogen production and pricing targets for 2030 and 2050, positioning hydrogen as a key pillar of their decarbonisation plans.
Seventeen of the 18 jurisdictions explicitly mention the steel industry in their hydrogen strategies, signalling interest in hydrogen-based steelmaking. However, only 56% - including Australia, Brazil, Canada, Germany, India, Indonesia, Japan, Korea, Malaysia, UAE, the UK, and the US - specifically reference hydrogen-based iron technologies. The remaining 44% do not detail the role of hydrogen in steel production, highlighting a gap in strategic clarity.
Most national hydrogen strategies prioritise supply-side conditions such as infrastructure, investment, and production capacity, alongside just transition measures and trade considerations. On trade, the focus is on international cooperation, market access, and maintaining a level playing field. Some countries emphasise hydrogen exports, leveraging their renewable energy resources to gain a first-mover advantage in the global market.
Comparison with other regions
Despite the commitment of Australian authorities in mobilising investments to enable a shift into green iron production (including the recent investment package for Whyalla steelworks), other economies appear to be making larger and financial commitments toward decarbonising the steel industry and supporting investments in the green iron space.
EU policy aims to lower the cost of green hydrogen and green electricity. If this is achieved, H2-DRI could become a competitive route for steelmaking in many EU economies.
Over recent years, the EU committed large resources for supporting the decarbonisation of existing steelmaking companies. Most of these projects focus on the transition to hydrogen-based EAF-DRI processes.
Within the EU, multiple steel producing economies as well as the EU itself have implemented policies to support the development of H2-DRI, usually as an integrated part of the steelmaking process as opposed to DRI/HBI as an exportable product. With the main concern about H2-DRI viability in some EU countries being the availability of renewable energy for sufficient hydrogen generation, and the costs of the latter, these policies usually take the form of grants for green hydrogen projects. The European Commission has approved around EUR 13 billion of support measures ranging from grants to conditional payment mechanisms to support the decarbonisation of the European steel industry.
The EU hydrogen strategy aims to produce 10 Mtpa of green hydrogen domestically and import an equivalent amount by 2030, supporting its broader industrial decarbonisation goals. To accelerate this transition, the EU has approved two waves of Important Projects of Common European Interest (IPCEIs), totalling EUR 6.9 billion in public funding across 72 green hydrogen projects (Hydrogeneurope, 2024[46]). Additionally, the EU Innovation Fund, expected to provide EUR 40 billion between 2020-30, is financing key initiatives like the HYBRIT project, which received EUR €143 million to advance hydrogen-based ironmaking. The Swedish government also supported the project significantly, with a grant of SEK 3.1 billion for the demonstration plant in Gällivare from the Swedish Energy Agency’s Industriklivet program (HYBRIT Development, 2023[47]).
Regulatory frameworks are also evolving, with the Hydrogen and Decarbonised Gas Market Package (Directive (EU) 2024/1788 and Regulation (EU) 2024/1789) establishing new rules for hydrogen infrastructure, renewable gas integration, and energy security, set for transposition by mid-2026. Despite these efforts, policy and market uncertainty remain challenges. ArcelorMittal has delayed final investment decisions on several H2-DRI steel projects, citing insufficient policy support, high energy costs, and market volatility, highlighting the ongoing need for stronger incentives to drive Europe's green steel transition (ArcelorMittal, 2024[48]).
In the MENA region, several countries have initiated financing support and tax incentives to promote green iron production, primarily through the development of green hydrogen projects.
In Egypt, the government approved a comprehensive incentive package in early 2024, including tax credits of 33%-55%, VAT exemptions on equipment and materials, and waivers on taxes, contracts, and land registration fees—an aggressive policy to attract investment into green hydrogen production (Martin, 2024[49]).
Oman’s hydrogen development is heavily state-backed, primarily facilitated through Hydrom, a government-owned entity overseeing hydrogen investments. Hydrom has secured USD 20 billion in green hydrogen agreements, with two major Dhofar projects valued USD 11 billion as part of the national strategy (Oman Observor, 2024[50]).
Saudi Arabia is making some of the world’s largest hydrogen investments, targeting 2.9 Mtpa by 2030 and 4 Mtpa by 2035, primarily for export to Europe as ammonia or HBI (Basirat and Nicholas, 2023[51]). The Public Investment Fund (PIF) has committed USD 10 billion through its Energy Solutions Company (ESC) to scale low-carbon hydrogen production. Meanwhile, Aramco, the state-owned oil company, acquired a 50% stake in a blue hydrogen producer, expanding its role in developing a low-carbon hydrogen network. To mobilise funding, Saudi Arabia introduced its Green Financing Framework (GFF) in March 2024, designed to attract capital for greenas projects, including hydrogen initiatives.
Identifying offtakers and fostering partnerships
A key element of green iron policy is identifying offtakers and developing partnerships. Australia is actively engaging in partnerships at both government-to-government (G2G) and government-to-business (G2B) levels, particularly in investment acquisition for green iron and related industries. These efforts are policy-supported and align with Australia’s broader climate strategy, though they are somewhat less focused on economic diplomacy compared to other nations. In addition to governmental efforts, non-governmental organisations (NGOs) play a unique role in Australia's green iron sector, including international outreach—an approach that is less common in other countries.
Beyond diplomacy, trade policy developments outside of Australia are increasingly relevant, with key questions surrounding whether other nations will accommodate green iron imports under carbon border mechanisms or apply traditional trade remedy measures. In December 2024, Australia and Korea signed a Green Economy Partnership with green metals as a focus area alongside critical minerals and green hydrogen (Government of Australia, 2024[52]).
While Australia is widely regarded as a strategic partner in various critical minerals strategies, few such frameworks emphasise iron ore, iron, or other raw materials for steel production. An exception is Canada, which has integrated these resources into its national strategy. This distinction highlights a potential gap in international policy focus on sustainable steel supply chains, despite growing global interest in decarbonising steel.
In September 2024, Australia and Germany expanded their collaboration in energy and climate initiatives by signing a Joint Declaration of Intent to negotiate a EUR 400 million bilateral funding mechanism under Germany's H2Global auction scheme. This agreement, equally funded by both governments, aims to establish new green hydrogen supply chains, facilitating the export of renewable hydrogen from Australia to Germany and other European markets. The partnership seeks to promote the development of renewable hydrogen infrastructure, support the decarbonisation of industries, and enhance energy security for both nations.
Furthermore, the University of New South Wales (UNSW) is leading the SuSteelAG project, a collaboration between the Australian Department of Climate Change, Energy, the Environment and Water (DCCEEW) and the German Federal Ministry of Education and Research (BMBF) (UNSW, 2024[53]). This initiative aims to explore the feasibility of creating a sustainable green iron and steel value chain between Australia and Germany. By working with German institutions, Australia gains access to new hydrogen technologies.
More generally on critical minerals, the EU and Australia have recently strengthened their partnership by signing a strategic agreement aimed at enhancing cooperation in critical raw materials, including iron ore. This agreement focuses on securing sustainable and resilient supply chains for essential minerals vital to both parties' economic and technological advancements. Key components of the partnership include collaborative research and innovation initiatives, investment in mining and processing infrastructure, and the development of environmentally responsible extraction and processing techniques.
The India-Australia Green Steel Research Partnership, launched concurrently with funding of AUD 10.4 million, is dedicated to reducing greenhouse gas emissions in steel production (CSIRO, 2023[54]). Given India's position as the world's second-largest steel producer, this partnership seeks to develop innovative technologies and processes to decarbonise the steel industry, contributing to global climate change mitigation efforts. These initiatives are part of the broader India Economic Strategy to 2035, reflecting a shared commitment to environmentally responsible practices and sustainable development.
Australia’s international partnerships in the iron and steel sector have predominantly focused on forging robust research and collaboration agreements that aim to build a sustainable green iron and steel value chain.
These partnerships often centre on advancing low-emission technologies, with a particular emphasis on iron and hydrogen as key product components. However, while significant efforts are directed toward innovation and technology development, there is comparatively little emphasis on establishing concrete trading relationships. Notably, cooperation agreements with potential clients for green iron in Japan are limited, highlighting a strategic gap between technological advancement and the creation of comprehensive market linkages for sustainable iron products.
Comparison with other regions
Australia has yet to secure strong offtake commitments from major global steel producers or industrial offtakers. While some proposed projects have been announced, the lack of structured international partnerships and long-term supply agreements raises concerns about market access and investment viability. While some governments have begun establishing export agreements with other regions, overall efforts in this direction still appear to be in their early stages.
Saudi Arabia, for instance, has been active in fostering partnerships with companies overseas for potential future green hydrogen exports, usually through the country’s Public Investment Fund (PIF). In 2023, the PIF alongside state-owned Aramco signed a shareholders’ agreement with China Baowu (with shares split 25-25-50, respectively) to build a 1.5 Mtpa steel plant in Saudi Arabia’s Ras al-Khair Industrial City featuring a H2-ready DRI-EAF plant that will commence operations using natural gas (Basirat and Nicholas, 2023[51]).
In the UAE, Masdar is partnering with Emirates Steel Arkan to produce steel using green hydrogen (Fuel Cells Works, 2022[55]). Further, Emirates Steel announced a new project to produce green iron in Abu Dhabi in collaboration with Japanese partners with the project currently in the feasibility study phase and commercial production expected in 2027 (Emirates News Agency, 2024[56]).
At COP28 in 2023 Brazil and the United Kingdom signed an MoU to identify sources of international assistance with decarbonisation of the Brazilian industrial sector through the Hub for Industrial Decarbonization in Brazil (HDIB) (Presidencia da Republica (Brazil), 2023[57]).
Interestingly, in 2023 the Japanese government, through its Nippon Export and Investment Insurance (NEXI), has recently signed a MoU with ITOCHU Corporation (ITOCHU) and CSN Mineração with the aim of securing stable production and supply to Japanese companies of high-grade iron ore pellets produced by CSN Mineração’s pellet feed production plant.3
Approvals processes
The South Australian government has been innovative and ambitious in making approval processes for green projects, including renewable energy generation, simpler and faster. Their “one window to government” policy, written into the Hydrogen and Renewable Energy Act 2023, is designed to attract investment for and speed up the concurrent development of renewable energy, hydrogen, mining and green iron by reducing the number of steps and interlocutors that investors need to engage with before development is approved by government.
One of the main policy actions the Western Australian government is taking to support green iron projects is the development of the Green Energy Approvals Initiative, establishment of the Coordinator General role and recently legislating changes to the Environmental Protection Act in 2024. The aim of these reforms is to strengthen the environmental approvals system, speed up approvals and secure major projects.
Transportation and energy infrastructure
Infrastructure is a key policy challenge from energy grid to port facilities. Whilst Australia has well-established infrastructure for iron ore production and exports, it is not yet certain if these are suitable for green iron exports because the prime locations for green iron and suitable-grade iron ore mining are not identical. This is less of a challenge in other countries where locations for high grade iron ore exports and green iron exports overlap, as in the case of Brazil. Additionally, Australia has unique infrastructure challenges as a result of the following characteristics relative to other geographies: great distances, patchworked energy grids, and high labour costs.
The South Australian government is investigating a common use infrastructure approach that could enable multiple proponents to partly share road, rail, telecommunications, power and water in the Whyalla area. The federal government is also trying to foster public investment in infrastructure in promising areas with a common use approach, but there are different considerations to be made in different areas, with the Pilbara being a particularly special case. Some small companies are joining together in a consortium approach.
The Western Australian government has applied policy measures to encourage the creation of common use infrastructure (particular for energy transmission) in the Pilbara that could unlock green iron opportunities. For example, through the Pilbara Energy Transmission Plan, it launched an Expression of Interest procedure for renewable energy transmission projects in the Pilbara, with winning candidates to be rewarded Priority Project status and support accessing Western Australia’s AUD 3 billion allocation of the federal Rewiring the Nation fund.
The water supply in Western Australia is controlled by a state-owned entity, which may open up certain policy options when it comes to supporting electrolysis in strategic areas. In contrast, the electricity grid in the Pilbara is not connected to the National Energy Market, instead it is covered by smaller grids privately controlled by mining companies, limiting the state’s near- and mid-term capacity to support renewable energy availability there. The development at Lumsden Point port in the Pilbara, to enable the import of wind turbine blades, and the coordination of the energy transmission through Pilbara Energy Transformation Plan, aim to accelerate the transition to renewable energy in the Pilbara.
Comparison with other regions
Australia appears to be the only country actively coordinating investments in infrastructure specifically aimed at fostering green iron developments. In contrast, while most other nations have yet to align their infrastructure investments with green iron objectives, Brazil stands out as an exception. The Brazilian government is making significant investments in the development of new port facilities, which are expected to enhance iron production and facilitate trade.4
In October 2024, Bahia Mineração (Bamin) - an integrated mining and logistics project that comprises the high-grade Pedra de Ferro iron ore mine - received priority for a R 4.6 billion (USD 904 million) loan from the public Merchant Marine Fund (with favourable terms, including a long repayment schedule). This funding will among other things be used towards the R 1.3 billion Ilhéus port terminal which was featured in the Growth Acceleration Program (PAC) relaunch. President Lula himself has urged swift completion of the port, aiming for inauguration before the end of 2026 (Mason, 2024[58]).
Since 2022, the EU Commission has been promoting 'IPCEI Hy2Use' (cross-border hydrogen projects that entail a high level of technological or financial risk and benefit the entire EU) to support the construction of hydrogen-related infrastructure. The programme particularly supports large-scale electrolysers and transport infrastructure for the production, storage and transportation of green hydrogen (European Commission, 2022[59]).
Labour and skills
In the green iron space, Australia’s labour situation is unique, because instead of replacing existing ironmaking they would be largely developing this workforce from scratch. Additionally, there are particular geographic challenges in Australia, where potential hotspots for green iron production do not always overlap with existing towns and pools of labour.
The mining sector in Australia, in many areas but particularly in the Pilbara, relies heavily on the Fly In Fly Out (FIFO) system in which the company pays for and organises the transfer of workers to mining sites via aircraft. While this system is very costly, it is estimated in some areas to nevertheless be significantly cheaper for the company than employing staff in residential positions. In 2012 (when real estate was significantly cheaper across Australia), Fortescue estimated that converting 330 workers at its Port Hedland facility from FIFO to residential roles would have cost them an extra AUD 33 million per year (Crosse, 2023[60]). The significant costs of both a FIFO system and building residential positions will likely pose a major challenge for green iron production in isolated areas in the short or medium term, especially given smaller profit margins compared to the resource sector. For this reason, building and supporting a stable labour supply is a key consideration for policymakers in Australia aiming to support green iron production, and the strategic location of production sites relative to existing towns appears to be a major consideration for investors.
Within the context of the FMIA framework, the Australian federal government takes a strong role compared to other countries regarding policies to support the availability of skills and labour necessary for green industry. The Energy Industry Jobs Plan, implemented by the Net Zero Economy Authority, will support workers to transition from closing fossil fuel plants to new jobs in the net zero economy. The federal government announced in May 2024 AUD 91.0 million in funding over five years to support the development of skills necessary for the transition to Net Zero. The main policies involved are the following:
AUD 50 million capital and equipment investment fund for facility upgrades to expand renewable energy training capacity;
AUD 30 million to turbocharge the renewable energy teacher, trainer and assessor workforce;
Establishing advocacy and promotional work for renewable energy careers;
Support for small and medium businesses taking on renewable energy, construction and manufacturing apprentices;
A preliminary study on using Australia’s international education sector to tackle critical skills shortages through work integrated learning and apprenticeships;
Adjusted settings of the New Energy Apprenticeships Program which supports apprentices needed for renewable energy jobs;
The National Hydrogen Technology Skills Training Centre is being established in partnership with the Victorian Government to promote hydrogen workforce development, supported by AUD 10 million in 2025-26;
To encourage skills in renewable energy, the federal government has partnered with state governments to provide a number of free places in renewable energy courses (among other in-demand areas) as part of the “fee-free TAFE” programme;
The federal government aims to establish Regional Workforce Transition Plans which will outline the employment and skills supports that are available in each region, and inform people about how to gain skills or apply for new opportunities in renewable energy jobs.
The state government of South Australia has also implemented policies to supporting the development of skills necessary for green iron production, in particular through a technical college located in Port Augusta. The Western Australia Government is investing in skills development to support the energy transition through the Made in WA plan and the development of a Clean Energy National Centre of Excellence (AUD 70.5 million joint federal/state investment) and a Pilbara Based Clean Energy Training and Research Centre (investment through the AUD 140 million Pilbara Hydrogen Hub, a joint federal/state investment).
Comparison with other regions
On the level of the EU, labour questions are prominent when structural changes to the steel industry are on the horizon because the industry employs around 330,000 people in the EU and supports a further 1.6 million jobs in related sectors. The EU's Just Transition Mechanism (JTM) aims to support industries, workers and regions who are most affected by the green transition. It provides funding for up- and reskilling of workers as well as job search assistance, with a total budget throughout 2021-2027 of EUR 19.3 billion (European Commission[61]).
← 1. According to EUROFER, 98 per cent of global iron ore production is consumed by the steel industry (EUROFER, 2013[98]).
← 2. See (Government of Australia, 2025[101]). Under the reformed Safeguard Mechanism, these baselines are set to decline by 4.9% each year through to 2030, aligning with Australia's commitment to reduce emissions by 43% below 2005 levels by 2030 and to achieve net-zero emissions by 2050. Facilities that exceed their baselines are required to manage their excess emissions, which can involve measures such as purchasing carbon credits or investing in emissions reduction technologies.