What makes iron ‘green’ and can Australia compete?


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In todays' edition:

  • Green iron explained
  • Decarb for shipping despite US making waves
  • Jemena loses court case over gas rule breaches

Green iron, but made in China

South Australia and Western Australia aim to be the preferred supplier of future green iron for steelmakers, if China intensifies its steel decarbonisation efforts when the trade war has been won.

But green iron made in China - using locally produced liquid hydrogen and imported ores - may outmuscle rivals if Australia can’t reduce hydrogen production costs, ANU Crawford School of Public Policy Fellow Dr Jorrit Gosens warned, speaking at Smart Energy 2025.

What makes iron green, other than the corrosive hydroxysalt mineral fougerite, and why does green iron matter for steelmaking?

To produce green iron for the steel mills of Asia, Europe and North America, Australian iron ore would be processed locally into pellets or lumps known as sponge iron or pig iron.

The green credentials come from the use of green hydrogen for processing and next-generation furnaces, with alternative fuel made locally using renewable energy sources – and a lot of water.

Fortescue’s CSIRO-backed Green Metal Project at Christmas Creek in the Pilbara plans to use green hydrogen in a reduction furnace to convert iron ore into sponge iron. That would be then processed in an electric smelting furnace to produce a high-purity metal that is suitable for the world’s steel plants.

The context

Iron ore is Australia’s top export, followed by coal, but local processing could transform a “dig and ship” economy into one that at least exports the precursors of steel.

Following two decades of rapid growth, iron ore export volumes increased by 1.2% year-on-year to 902Mt in 2024 with output expected to peak within three years, according to the latest Resources and Energy Quarterly issued by the Office of the Chief Economist.

Green iron proponents say the emerging commodity could become a leading export, which would safeguard the economy and make a material difference in a net-zero world.

If coal-fired steelmaking was a country, it would be the third-largest emitter after the United States and China.

Decarb for shipping despite US making waves

Mandatory fuel standards for international shipping and an industry-wide carbon pricing mechanism have been agreed after 10 years of talks. (BBC)

Shipping emissions could otherwise more than double by 2050, which would undermine the objectives of the Paris Agreement to limit global warming to 1.5C.

Interim guidelines for the safe use of ammonia fuel to power vessels, approved in December 2024, were an important step towards the development of alternatives to diesel or gas.

The United States pulled out of the talks in London and threatened to impose “reciprocal measures” against fees charged to US ships. (Aljazeera)

“While the targets are a step forward, they will need to be improved if they are to drive the rapid fuel shift that will enable the maritime sector to reach net zero by 2050. While we applaud the progress made, meeting the targets will require immediate and decisive investments in green fuel technology and infrastructure. The IMO will have opportunities to make these regulations more impactful over time, and national and regional policies also need to prioritise scalable e-fuels and the infrastructure needed for long-term decarbonisation.” — Jesse Fahnestock, Director of Decarbonisation at the Global Maritime Forum.

Pacific nations had pushed for a universal carbon levy, which they said would have created a pathway to steeply reduce shipping emissions, ensure a just and equitable transition, and provide predictable financing for those suffering the most from climate impacts.

Ministers from Fiji, the Marshall Islands, Seychelles, Solomon Islands, Tuvalu, and Vanuatu, as well as a representative of Palau, abstained, saying the agreement would do too little, too late to cut shipping emissions and protect their islands, RNZ reported.

Other critics said the UN shipping agreement was a victory for multilateralism but a failure for the climate. (Clean Technica)

Countries still need to give final approval at an International Maritime Organisation meeting in October. (Reuters)

How it works

The IMO Net-Zero Framework is the first in the world to combine mandatory emissions limits and greenhouse gas pricing across an entire industry sector.

A fund will be established with collected revenues to reward low-emission shipping and mitigate negative impacts on small, undeveloped and vulnerable states that bear the brunt of climate change and economic pressures in the shipping sector.

Ship owners of large ocean-going vessels over 5,000 in gross tonnage will be penalised if they don’t adopt cleaner fuels.

The framework will charge ships a penalty of $380 per metric tonne from 2028 on every extra tonne they emit above a fixed emissions threshold, plus a penalty of $100 a tonne on emissions above a stricter emissions limit.

What’s next

Draft fuel-specific training guidelines for training seafarers working on ships powered by alternative fuels and new technologies will be submitted for approval in June.

The guidelines under development include the use of methyl/ethyl alcohol, LPG, ammonia, hydrogen, battery-powered shipping, and hydrogen fuel cell-powered ships.

Catch up

Policy


The NSW government granted $11.25 million to each of the four councils hosting the Central-West Orana Renewable Energy Zone, spread over 54 community projects. These include affordable housing in Mudgee for key workers, critical water infrastructure for Warrumbungle and Upper Hunter Shire Councils and a Renewable Energy Awareness and Career Training Centre in Dubbo which will enable locals to secure renewable energy jobs.

Italian climate think tank Ecco’s Gas and the Green Deal: The Geopolitics of Trump, the EU and China found the objective of the US appeared to be to dismantle the European Green Deal through a forced realignment of the transatlantic relationship around fossil fuels, deterring Europe from turning to new suppliers of clean energy in global markets, such as China.

The Queensland government’s support for extending the life of the Callide B Power Station beyond its planned closure date of 2028 does not align with new analysis showing both the 700 MW Callide B and 844 MW Callide C are “incompatible with today’s dynamic energy system”. A report by Nexa Advisory Principal and ex-AGL policy executive Stephanie Bashir found Callide B had seen downtime of 4,000 hours since 2020 - equivalent to each unit being offline for 12 weeks a year.

Few, if any, of the 102 coal-fired units closed in the US in the past four years would be reliable candidates for a restart. (IEEFA)

Capital


BP warned of weak gas trading and rising debt in its Q1 2025 trading statement.

Projects


Greenleaf Renewables said it was committed to working with the Queensland government on next steps for the $1 billion Moonlight Range wind farm and BESS project after Deputy Premier Jarrod Bleijie issued a call-in notice. (Industry Queensland)

Norway-based Equinor’s 810MW Empire Wind 1 project off the coast of New York has blown past President Donald Trump’s executive order to block or pause all new wind energy leasing in federal waterways, because it already had approvals in place. (NYPost)

A large fire in January at one of America’s largest battery installations has become a rallying cry for opponents of the technology. (Bloomberg)

The potential extension of Woodside’s North West Shelf LNG project has sparked mixed reactions from locals in the city of Karratha, where the presence of the gas industry is never far away. (The World Today)


Regulation


In a rare weekend sitting of both houses, the UK parliament passed an emergency law to take control of British Steel’s furnaces at Scunthorpe, which is the last plant in the UK capable of producing virgin steel used in major construction projects. (YouTube) (BBC)

Gas distributor Jemena was fined $5.5 million after it lost a Federal Court case brought by the Australian Energy Regulator (AER). The judge found Jemena breached the National Gas Rules on thousands of occasions between 2019 and 2022 by failing to determine Auction Quality Limits in accordance with AEMO procedures. The end result meant it was understating its available capacity and auction participants paid more than they needed to. The Court also ordered the appointment of an independent expert to review Jemena subsidiaries’ controls, and for Jemena to pay $300,000 towards the AER’s legal costs.

Technology


Having once promised to ‘democratise energy’, Aussie blockchain tech has become caught by the shadowy and unregulated world of crypto pump-and-dump schemes, according to Michael Mazengarb’s Tempests and Terawatts.

Japan’s numbers for its plan to rely on “clean” ammonia-fueled coal just don’t add up. (Climate & Capital Media)

Research


In Texas, a state at the forefront of wind project viability and political polarisation over wind power development, Cornell-led research published in Energy Policy found Texans on average welcomed its local benefits. Texas lawmakers have been working to disincentivise new wind development in the state by forcing providers to pay extra for grid services and back up supply, eliminating state tax credits, and imposing new siting regulations for renewables. Positive attitudes toward renewable energy facilities increased when economic benefits - job creation, local tax revenue, lower tax rates, tourism revenues, increased property values, reduced electricity rates or landowner compensation - were realised, the researchers found.

“We find no evidence for NIMBY whatsoever - if anything, the opposite, that people seem to like their local wind turbines … It's not that rural Texans are eager to stop climate change, but local communities are genuinely getting economic benefits from these wind turbines, and people like that.” — Lead author Talbot Andrews

Vehicle-to-grid technology deployment could help balance the electricity grid, but its large-scale adoption is being hindered in Europe because it’s unclear to the players involved how to become “V2G-ready”, researchers found.

People


Red Earth Energy Storage promoted Marc Sheldon to CEO from COO, replacing founder Charles Walker who will remain at the company as a Non-Executive Director

Random


Ukraine: What's up with Europe's largest lithium deposits? (DW)

What's on

April 14
AEMO ISP Methodology

Submissions are due today on AEMO’s draft ISP methodology.

April 14
Melbourne Energy Institute Public Lecture

Ángela Flores from the University of Chile will discuss how power systems are facing increasing pressure from climate change.


April 16
Alcoa Q1 financial results

President and CEO of aluminium giant Alcoa William Oplinger and CFO Molly Beerman will update the market during an Earnings Presentation & Conference Call.

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