Business-as-usual steelmaking is impossible in a world aiming for net zero emissions, but Australia could forge a new future with Japan, industry experts say.
A "paradigm shift" is underway in Australia's Pilbara region for both raw materials and future products, Chris McMahen, group manager at iron ore giant Fortescue Metals Group, said on Tuesday.
Japan and Australia have a long partnership in steel, not just because Australia is the world's largest producer and exporter of iron ore but also because it is the source of one-fifth of the world's metallurgical coal.
The two economies are already collaborating to make the best of the energy and industrial transition required by global climate goals.
"A key shared challenge of our two countries is climate change," Australian National University Vice Chancellor Brian Schmidt told a webinar co-hosted by ANU and the University of Tokyo.
But alternatives to emissions-intensive steel will require the trade and investment relationship to change, and research collaboration to increase, he said.
In Japan, steelmaking is the largest source of emissions and the blast furnace processes that have been developed over thousands of years play a central role in the economy.
Mr McMahen, who represents the Minerals Council of Australia at international committees, is positioning the Fortescue businesses to supply the raw materials required by a decarbonised iron and steel making industry.
He said the company's ambitious 2030 and 2040 carbon neutrality targets are well ahead of its customers, which "poses a very big challenge" for Fortescue.
FMG offshoot Fortescue Future Industries is investing heavily in green hydrogen and green ammonia, but acknowledges the need to use a range of options.
"We're developing internally our own new and novel and green steel and iron making technologies," he said.
"We have placed a particular focus on electrolysis technologies which can maximise the use of renewable electricity without the need to convert to hydrogen," Mr McMahen said.
"But we are also evaluating existing and emerging alternative iron making technologies that are utilising direct reduction and hydrogen."
He said the availability of renewable energy was also being looked at for pig iron, crude steel and semi-finished steel products.
Although Japan wants to transition its industries, ANU researcher Emma Aisbett said Australia has its own green steel opportunity.
Abundant renewable energy resources - wind and solar - are co-located with Australia's massive iron ore deposits, Dr Aisbett said.
But new processes will take years to be commercially viable, in Australia or Japan, the webinar heard.
Steel industry expert Hiroyuki Tezuka said the costs of achieving carbon-neutral steel would be "massive", and steel customers will need to pay more.
Even with cheap hydrogen, production costs are expected to significantly increase.
And the detail of hydrogen-based iron making is still unknown.
Japan is finding it harder than Australia to decarbonise its electricity supply, which became more dependent on fossil fuels after the Fukushima nuclear disaster in 2011.
University of Tokyo associate professor Ryoichi Komiyama expected hydrogen to become the "socially selected" option over time.
But he warned that green and low-carbon steel are still at the "demonstration or prototype" stages.
Australian Associated Press
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