Australia needs $28.8 billion by 2030 for a green iron industry, according to a new report.
Australia is certainly under heavy financial pressure to seize the opportunity as a world leader in the iron industry with its green side. According to a new report by Mandela Partners and commissioned by climate solutions firm Boundless Earth, Australia will need an estimated $28.8 billion in facilities, renewable energy systems, and production plants necessary for establishing the new industry by 2030.
This type of green iron could potentially reduce carbon emissions globally by as much as 1.7 percent while creating significant economic growth in Australia. With its major renewable energy sources and significant iron ore, it is poised to make this nation a leader globally in the new area of business. In fact, transitioning to production of this type of iron could add as many as 28,000 jobs into the labor pool that could accelerate it exponentially.
The report indicates that, apart from private investment, the green iron industry will solely depend on government support to sustain itself. In case the financial and infrastructural development is not provided, Australia will miss the ambitious targets set in the green energy sector.
What is green iron?
Such “green iron” is smelted using renewable forms of power, like wind and sunshine power.
Conventional iron production depends upon coal, which emits tremendous tons of CO2 into the surroundings to cause global warming. However, this is not how green iron production shall do since it will rely upon green hydrogen produced from an electrolysis process which only uses renewable electricity in splatting water to go into hydrogen and oxygen parts. Carbon emissions would become zero.
The country can use this as a key game-changer in helping it achieve net-zero emissions. The industry will contribute $103 billion to the local economy by 2050. A thousand jobs could be established as the green iron and hydrogen facilities are built within an expanding industry that focused on clean, renewable energy.
Why Australia?
Australia is likely to lead the world in the production of green iron as it has tremendous renewable energy resources like solar and wind power, which are basic ingredients in the manufacture of green hydrogen.
Australia also hosts the world’s largest iron ore reserves. As of 2023, it amounts to about 58 billion tonnes. The country is the largest producer of iron ore worldwide, and in that regard, it’s in a perfect position to be making the switch to green iron and thereby contribute to the emission cuts globally.
Green iron industries could contribute very much to lowering emissions worldwide, helping to decrease global CO2 emissions by up to 1.7% in 2025. In this regard, the green iron sector, when developed by Australia, will be able to reach 310 million tonnes of annual production of green iron. That will be a great step for the country to achieve net-zero emission targets while maintaining a strong stand at the global renewable energy transition.
This would involve enormous investment. That $28.8 billion will amount to the development needed by 2030 to develop such infrastructure, from renewable energy systems to green hydrogen production facilities and green iron plants. All these will be critical investment helping Australia create a competitive industry in green iron and keeping abreast of the race for clean energy globally.
Role of Government and Private Investment The report emphasizes the necessity of government involvement in developing Australia’s green iron industry. Though private investment will be significant, the scale and scope of infrastructure investment required will call for government involvement. There will be a need for proactive government policy and financial support to create an enabling environment for green energy infrastructure projects.
The report further reiterates that dependence on private investment alone would not work in the direction of achieving Australia’s green energy goals. It will require public-private partnerships as well as incentives from the government to finance the venture and get the transition initiated in a green iron economy. The lack of investment in renewable energy infrastructure also has been one of the critical factors which must be addressed to accelerate the shift of Australia towards green energy.
According to the research, unless Australia acts very fast, it stands at a very good chance of becoming a global leader in green iron production. If it is not matched with proper investments and government leadership, there is a high risk for Australia to lose its market position globally.
The report highlights the need for prompt action so that Australia can fully leverage this chance to create an industry for green iron that can lead the economy and serve global climate purposes.
Economic impact and job creations
The green iron industry would have a very profound impact on the economy of Australia, and the country could generate around $103 billion annually by 2050. Moreover, green hydrogen and iron plants could lead to the generation of about 28,000 jobs in order to help strengthen the workforce and provide an easy transition towards a sustainable economy.
While the green iron industry would grow from the production, a larger growth would result from the broader renewable energy sector. Increasing demand for green hydrogen and renewable energy infrastructure would spur the broader clean energy industry toward further growth and job opportunities.
Conclusion: This will give opportunity for economic growth, creation of employment, and reduction of emission on a global level. Therefore, achieving this potential demands investment in renewable energy systems, green hydrogen production, and green iron plants on a considerable scale. Governments must collaborate with the private sector to initiate and advance the establishment of the industry in Australia for it to take a global leadership in renewable energy. Although Australia has excellent natural advantages as well as abundant renewable energy resources, there would be a huge opportunity to contribute to global climate action. However, that vision of a green iron economy needs swift action and very strong government policies in place.
Source: Proactive