In a major move towards decarbonising heavy industry, the Australian government has announced the establishment of a $1 billion Green Iron Investment Fund.
The initiative aims to position Australia as a global leader in the manufacturing of low-emissions iron and steel.
The fund will support the development of greenfield projects and incentivise private sector investment to build robust supply chains for low-emission iron and steel.
A significant portion, up to $500 million, is earmarked to facilitate the transformation of the Whyalla steelworks in South Australia, securing local jobs and driving the energy transition.
The remaining funds will be available to applicants across Australia, supporting both upgrades to existing facilities and the development of new projects focused on enhancing the domestic value of Australia’s iron ore industry.
The announcement has been met with enthusiasm from industry and union leaders alike.
The Australian Workers’ Union, Australian Manufacturing Workers’ Union, Electrical Trades Union, and Maritime Union of Australia jointly welcomed the investment — highlighting the certainty it provides to workers and the Whyalla community.
“This historic investment into a critical manufacturing facility will secure Whyalla’s future after years of reckless mismanagement,” the unions said in a joint statement.
“This package allows them to get back to the business of making the steel this country depends on.”
The Australian Steel Institute (ASI) also lauded the government’s intervention.
ASI CEO Mark Cain stated: “We welcome the clear signs from both governments of their support for the local industry and have been working closely with them on ensuring a prosperous future for the industry.”
The Australian Conservation Foundation (ACF) echoed the positive sentiment, emphasising the importance of decarbonising the iron and steel sector to meet climate goals.
“Decarbonising Australia’s existing iron and steel production facilities, while developing new green steel projects, is critical for Australia to establish itself in the net zero global economy and make a significant contribution to reducing our climate pollution,” said ACF’s climate policy adviser Annika Reynolds.
The government estimates that Australia generated over $100 billion in export revenue from the iron and steel industries in 2023-24, supporting over 100,000 jobs.
Transitioning to green iron production is expected to further boost the economy and reduce global emissions.
Research from the Minerals Institute of Western Australia suggests that a single green iron plant could contribute an additional $85 billion to the gross domestic product, increase real income by $2.4 billion annually, and create 1,540 full-time equivalent jobs.
The Green Iron Investment Fund is part of a broader strategy to bolster Australia’s energy and mining sectors.
The government has previously announced a $2 billion investment in Australian-made aluminium and introduced Production Tax Credits for hydrogen and critical minerals.
Investments have also been made in critical minerals and rare earths projects, Geoscience Australia, and Hydrogen Headstart.
“The Australian government is backing our green metals producers as the world moves towards net zero,” said Minister for Industry and Science Ed Husic.
“Through this $1bn fund, we are supporting industrial diversification, productivity and economic growth, for a Future Made in Australia.”
