Two steel projects secure million dollar government investment to protect the sector in Australia and move towards cutting emissions
The Australian federal government is spending the Aus$198.7 million (US$122.21m) from its critical industries fund on greening steelworks in Port Kembla and Whyalla.
Bluescope Steel will get $135.8m (US$89.78m) to reline and upgrade its No 6 blast furnace at the Port Kembla Steelworks in New South Wales from the Powering the Regions Fund (PRF), which needs renovation before its predicted end of life in 2030.
Bluescope’s rejuvenated coal-fired blast furnace will not deliver green steel but it does promise emissions reductions of up to 172,000 tCO2-e per year.
Another $63.2m (US$41.43m) is to businessman Sanjeev Gupta’s Liberty Steel Australia, to buy and commission a low-carbon electric arc furnace (EAF) to replace an existing traditional blast furnace at the Whyalla Steelworks. The new EAF will support the manufacturing of green steel.
The BlueScope project will employ approximately 250 additional workers on site during the upgrade and reline of the blast furnace and will help secure the local workforce over the long term, including the thousands of jobs at the Port Kembla Steelworks. Liberty’s shift to green iron and steel will increase its workforce by around 24% over five years and help provide retraining and opportunities to learn new skills for a substantial number of existing employees.
These grants are the first to be delivered under the PRF through its Critical Inputs to Clean Energy Industries program, which supports hard-to-abate sectors like steel so Australia can keep making the things that are vital to the energy transition, including electricity and rail infrastructure, like wind towers, solar farms and energy transmission, and the construction of energy efficient buildings.
The Prime Minister Anthony Albanese of the Australian Labor Party has also committed $200 million in grant funding for the hard-to-abate cement and lime and alumina and aluminium sectors, with successful projects to be announced in the coming months.
“Now is the time to phase out increasingly obsolete equipment and technology that no longer has a place in our world and embrace the installation of new EAF technology that ensures environmentally sustainable steel production in Whyalla will continue throughout the 21st century,” said Gupta after Liberty’s grant was confirmed publically.
He says the company is looking at renewable energy and other green technologies as well for the steelworks, including locally produced green hydrogen.
Liberty’s shift to green iron and steel will increase its workforce by around 24 per cent over five years and provide retraining opportunities for many existing employees. Bluescope will need an extra 250 people to handle the refitting.
The PRF grants are the first hald of the Aus $400m Critical Inputs to Clean Energy Industries program, which supports hard-to-abate sectors like steel and was developed following the Safeguard Mechanism reforms.
The government’s priority for industries like steel is to keep them running as consumers and investors demand better efforts on decarbonisation, said energy minister Chris Bowen at a press conference in Port Kembla, announcing the grants.
“A serious country makes things, and a serious country makes steel. And as far as we’re concerned, as long as we have a say in it… Australia will be an important country making steel and, as I said, steel that is vital for our renewable energy transformation,” he says.
“Our renewable energy transformation will require five billion tonnes of steel between now and 2050 across the world.
“We want to make sure products vital to our economic future like green steel are made in Australia, but this will require innovation and new ways of processing iron ore that decarbonise our steel industry. This $200 million investment in the steel sector is about securing the long-term future of the steel industry in Australia.”
Although emissions reduction is core to the $1.9 billion PRF, the two grants show how difficult it will be to decarbonise industries like steelmaking.
Liberty said in April last year that it had ordered a 160 tonne EAF for the Whyalla steelworks and it should be operational by 2025.
And in September it announced – with a prime ministerial visit – that it had closed the Whyalla coke ovens with which it’d made the coal it needed for the blast furnaces. However, the company is still using imported metallurgical coal while it waits for the EAF.
“Whyalla will be the global epicentre for manufacturing low carbon iron and steel, it has all the elements required to dominate the green steel industry – vast reserves of magnetite of the highest quality, abundant generation of renewable energy, deep sea port, a robust workforce, supportive governments and invested owners,” Gupta says.
