Forging a green steel future in Western Australia

Steel is a pillar of modern civilisation, and an adequate supply of this material feeds into vital applications that support a sustainable economy. However, traditional steelmaking accounts for 7% of human-generated emissions worldwide due to its reliance on coal-fired furnaces. Mounting climate and regulatory pressures drive the shift to decarbonise this heavy industry.

The global deadline to limit temperature rise to 1.5°C is looming, which sharpens the focus on what hard-to-abate sectors can do. As the biggest contributors to carbon emissions, the mining, manufacturing and industrial industries are under more pressure to explore and transition to cleaner pathways to achieve net-zero targets by 2050. This crucial tipping point requires these industries to look beyond the business-as-usual approach and adopt sustainable practices. Therein lies the opportunity to decouple from coal-dependent activities and explore the potential of green steel as a clean alternative. While in its nascent stage, green steelmaking offers great economic value and emission reduction potential. And it is in this space that Western Australia is setting an example.

The Western Australian Climate Policy guides the government’s plan to shape a climate-resilient, low-carbon economy. It outlines clean manufacturing and future industries as a priority area. In this domain, the state is well-positioned to scale up the production of green steel by leveraging its renewable energy and hydrogen potential and world-leading iron ore industry.

The Minerals Research Institute of WA (MRIWA) engaged GHD Advisory to undertake a Green Steel Value Chain Assessment to investigate the viability of sustainably processing the state’s iron ore to green steel. A key question guides this study: Can Western Australia competitively deliver across the various stages of the green steel value chain?

From this exploration, an innovative value chain model emerged to examine opportunities to decarbonise all stages of the steelmaking process. GHD Advisory evaluated scenarios and their delivery against infrastructure and investment needs, market dynamics, existing and required resources, and potential iron ore industry partnerships with steelmaking customers. In addition, the future of iron ore mining as well as iron and steel market dynamics were assessed to determine the opportunities and risks for each scenario.

GHD Advisory’s alternative future modeling depicts the entire iron ore-to-steel value chain. It analyses five main pathways where fossil fuel-based processes are replaced with renewable energy and renewable hydrogen options. These are:

1. Green iron ore mining – This considers the export of hematite and magnetite concentrate from Western Australia using renewable energy. The pathway sees the conversion of existing iron ore mines and the development of new, emissions-free ones through investments in large-scale renewable power generation.

2. Green pellets – Moving away from coal use, this pathway considers producing and exporting green pellets using renewable hydrogen. It upgrades and value-adds to iron ore to make a new product to be supplied to the ironmaking and steelmaking markets.

3. Iron-making from green pellets using fossil fuels – Examines the production of hot briquetted iron (HBI) from green pellets. Renewable hydrogen will be used to produce the pellets and natural gas will be used to produce the HBI.

4. Iron-making from green pellets using green H2 – Considers the production of HBI from green pellets, using renewable hydrogen to produce both the pellets and the HBI. In this scenario, HBI will be produced in a vertically integrated domestic supply chain that is fully powered by renewable hydrogen and electricity.

5. Green steel – An option that depicts the domestic production of green steel in a fully vertically integrated supply chain, powered by 100% renewable hydrogen and renewable electricity.

Across these five scenarios, the state’s abundant reserves of magnetite and hematite iron ores present a strategic advantage. The study emphasises the importance of harnessing domestic mineral wealth to produce downstream iron products, which can be value-adding to the green steel industry.

With the value chain model exploring attainable scenarios and replicating key features of the Australian iron industry, Western Australia’s bold ambition meets pragmatic pathways to make the state a world leader in research, development and commercialisation.

The Green Steel Value Chain Assessment is the first publicly available, free global study. While this pilot model is tailored to Western Australia’s context, the potential opportunities and applications are not limited within the state. It has adaptable variables making it scalable to other regions and offering the confidence to explore the potential of a green steel industry in the broader landscape. In addition, the study has been endorsed by government figures, with individuals presenting findings and supporting GHD Advisory’s roadmap in various conferences.

Moving towards a green steel future may be a formidable challenge, but the study asserts that opportunities exist to make it possible on a global scale. The value chain model is a significant step towards pursuing positive economic outcomes and net-zero gains.

View and download the report here.

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