Australia risks missing a major green iron and steel opportunity worth up to $100 billion unless stronger trade partnerships are developed with key Asian markets, according to a new report commissioned by WWF-Australia.
The report, prepared by Deloitte Access Economics, argues that demand-side policies and international trade agreements will be critical to unlocking Australia’s emerging green iron industry.
Australia currently has eight green iron projects ready to launch and around 10 million tonnes of annual production capacity in development. However, none of the projects has reached a final investment decision due to a lack of confirmed buyers.
At the same time, competing producers in the Middle East are securing long-term offtake agreements with Asian steelmakers, raising concerns that Australia could lose its first-mover advantage.
The report identifies Japan, South Korea and China as priority markets for future green iron exports. These nations are major consumers of Australian iron ore and significant steel producers. Australia also imports substantial quantities of steel and steel-based products from these countries, creating opportunities for new low-emissions supply chains.
Under the proposed model, Australia would export green iron while importing products manufactured using green steel, creating what the report describes as a “green trade corridor”.
WWF-Australia senior manager low carbon futures Monica Richter said Australia possessed the natural advantages required to become a global leader.
“Australia has the iron ore, renewable energy resources and deep trade ties to be a global green iron leader, but without clear buyers, projects cannot secure financing,” she said.
“The Australian Government will need to work with its counterparts in Asia to align supply, demand and policy in ways that create mutually beneficial trade corridors.”
The report highlights the economic and environmental significance of the opportunity. Decarbonising iron and steel production is regarded as a key component of global efforts to limit warming to 1.5°C, while a mature green iron industry could generate export revenues of between $96 billion and $174 billion annually.
To support industry development, the report recommends three priority actions: providing time-limited offtake support for early projects, creating demand in sectors such as infrastructure and vehicle manufacturing, and strengthening trade relationships to develop export markets.
The recommendations form part of a broader strategy described as “green trade statecraft”, aimed at positioning Australia within emerging low-emissions industrial supply chains and capitalising on growing international demand for greener materials.