The architect of some of Australia's most ambitious policies on tackling climate change has outlined a vision for Port Kembla at the heart of Australia's transition to becoming a renewable energy "superpower", but has said steelmaker BlueScope needs to pick up the pace or get left behind.
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The comments come as the federal government begins the process of establishing a national transition Authority, scaling up Australia's ambition to reach Net Zero.
Professor Ross Garnaut has been developing the idea Australia as a renewable energy superpower - producing well above the nation's need for green energy and exporting the rest to a renewables-hungry world - since the release of his book Superpower In 2019, and says Port Kembla needs to be at the centre of any transition.
"Port Kembla is very well placed to be one of about eight major super industrial centres in Australia," he told The Mercury.
The region's industrial base could be turned to making green iron and steel from renewable sources, whether generated locally through offshore wind and floating solar panels above the reservoirs in the escarpment, or via connections to the grid.
"Port Kembla's role in green iron and steel making is potentially far bigger than steel making in Port Kembla ever was before," Professor Garnaut said.
"The Australian steel industry produces about four million tonnes of iron and steel. When we build a superpower, there will be hundreds of millions of tonnes of green iron produced in Australia."
BlueScope has signalled its intentions to achieve net zero across its operations by 2050 but has said the technology for steel produced with renewables-generated hydrogen is not ready at a commercial scale. Currently, the ASX-listed steelmaker is preparing the business case to reline the motherballed No. 6 blast furnace to enable it to produce steel using traditional methods.
In a half year report to investors in 2021 when plans for the relined blast furnace was unveiled, BlueScope CEO Mark Vassella told reporters and analysts that the company intended to be a "fast follower" when it came to green steel.
However, in a recent press conference in Wollongong, Mr Vassella eschewed that terminology, saying the company was investing vast sums to support its green vision.
"We've got a whole bunch of incredibly capable resources that are focused on what are the latest technologies, what's viable," he said. "What is clear to us is that this is not just a steelmaking issue, it requires public policy, renewable energy, hydrogen ecosystem. It's not a simple answer but we're investing both with resources, money and commitment around what green steel and decarbonisation of steel looks like."
In addition, BlueScope and other large industrial emitters recently committed to limit emissions to 1.5C through decarbonising their respective supply chains.
"Our organisations in the industrial sector will support investment in the development, deployment and integration of the low-carbon solutions needed to decarbonise effectively," the joint statement read.
However, Mr Garnaut said major players may not be the ones to lead the Illawarra to its green industrial future.
"One should not expect leadership in new technology from established companies, innovation is usually led by new players," he said.
"It was not IBM, but five different sets of kids in garages that built the IT revolution.
"It's good that BlueSCope hopes one day to be part of the future, but other companies will play the major role in building the future."
Already, attention and investment in green iron and steel is happening elsewhere in Australia. The WA government allocated land in January the Pilbara to be a green industrial hub, with interest from Korean steel giant Posco in a green iron project as well as Andrew Forrest's Fortescue Future Industries.
The Pilbara's vast reserves of iron ore and the potential to also produce green energy through solar, taking advantage of the location's inherent qualities has seen a rush of interest in the potential for green iron and steel to be made closer to the source.
Down south, the South Australian government has set aside $593 million for a green hydrogen plant in Whyalla, providing a renewable energy source for the steelworks located there. Owned by British entrepreneur Sanjeev Gupta, the Whyalla steelworks is already getting rid of coal, swapping its ageing blast furnace for a electric arc furnace, increasing its production by half to 1.5 million tonnes per annum.
The Port Kembla steelworks produces about three million tonnes a year.
A challenge in switching to green steel is the type of iron ore that can be used. Traditional steelmaking uses hematite ore, however direct reduction iron - used in green steel - uses magnetite ore. However, Professor Garnaut said swapping the two would not be a great difficulty.
"Australia has large magnetite resources some of which are mined now and exported and there will be the need for expansion of magnetite mining," he said. "Expansion of mines is something that Australia is deeply experienced in and is good at."
Overcoming these technological challenges will require an army of workers Australia has had challenges producing recently. On Friday, the federal government announced the creation of a Net Zero Authority, to coordinate the workers and communities involved in the transition to a green energy grid.
Announced in the Hunter, the taskforce's most pressing challenge will be to ensure those in the regions sustained by coal, whether through mining or power, are assisted in the journey to net zero, however the next challenge will be to build the clean energy industries of the future, such as green iron and steel.
Research from the Climateworks Centre at Monash University, suggests that the way to do this would be clustering renewable energy industrial precincts, and found the Illawarra as a suitable location.
With a concerted push now on from industry, government and the community, Professor Garnaut's vision for a renewable energy superpower, producing vast amounts of green steel, may not seem like the dream that it appeared to be when announced four years ago.
"The climate wards have dragged Australia down to some extent, but we're now moving beyond those," he said. "Now that there is a more general understanding of the opportunity, there's a chance for us to get on with the job, and not be blocked unnecessarily by arguments about where we should be heading."
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