Australian Government announces $1bn fund for low-emission iron and steel production

The Australian Government has unveiled the $1 billion Green Iron Investment Fund, aimed at positioning the country as a global leader in green iron production. The fund aims to support the development of low-emission iron and steel by backing new projects and stimulating private sector investments.

The fund will allocate up to $500 million for the transformation of the Whyalla steelworks, which is intended to enhance local employment and facilitate the energy transition. In addition, at least $500 million will be made available to applicants across Australia, including both existing facilities and new projects aimed at increasing the value of the country’s iron ore industry.

The Green Iron Investment Fund is a competitive fund developed following extensive consultations with the sector. Australia generated over $100 billion in export revenue in 2023–24, and the broader iron and steel industry supports over 100,000 jobs, both directly and indirectly.

Green metals play a crucial role in global decarbonization efforts, as iron and steel production accounts for 8% of global emissions, with iron contributing up to 90% of this figure.

Research from the Minerals Institute of Western Australia indicates 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.

Minister for Industry and Science Ed Husic said, "The Australian Government is backing our green metal producers as the world moves towards net zero. The Green Iron Investment Fund will enable Australia to leverage its existing iron ore supply chain, renewable energy potential, world-class research, and highly skilled workforce."

This announcement complements the Albanese Labor Government’s existing commitments to support Australia’s energy and mining sectors. The government has already committed $2 billion to Australian-made aluminium, passed legislation for Production Tax Credits for hydrogen and critical minerals, and invested in significant critical minerals and rare earth projects through the Critical Minerals Facility. Additionally, $3.4 billion has been invested in Geoscience Australia and funding has been provided for Hydrogen Headstart to boost hydrogen and clean energy industries.