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3 May 2022 10 min read

More than ninety per cent of Australia’s current iron ore exports are mined from the deep red weathered Pilbara landscape in Western Australia - and over 70 per cent of this material is shipped to China, where it is made into iron in blast furnaces using coke manufactured from coal, then further processed into steel.

Australia mines almost half the world’s iron ore – and the mineral is the nation’s largest single export revenue source, bringing in A$153 billion last financial year [PDF · 11MB]; but with iron ore prices falling to an 18-month low in December 2021 as China lowered its steel production, Australia’s Chief Economist forecasts that iron ore export earnings will fall to A$86 billion by 2023–24 [PDF · 11MB].

Steel is the world’s top engineering and construction metal, and also the most recycled material in the world [PDF · 1.6MB] - and the process of turning iron ore into steel currently contributes around seven per cent of global greenhouse gas emissions.

That puts steel production firmly on the global climate action radar, prompting research and investment into lower-emission and eventually net-zero emission steel manufacturing.

But producing ‘green steel’ – that is, removing carbon emissions from steel ­– is a complex challenge.

The challenge and opportunity for high-emission steel

“Last year alone, 1.8 billion tonnes of steel were produced globally; we can’t just flip a switch to implement net-zero processing for steel,” says Andrew Jenkin, who is the Research Director – Mineral Processing at CSIRO.

Not only must producers change their processes away from traditional coke-fired blast furnaces, but the mining sector will face changed demands for raw materials that can be used in new fossil-free processes.

The whole transition will also need global policy and economic support – from market creation and subsidies, to support for current stakeholders (particularly workers) to help them transition fairly to new ways to make steel.

“Steel production relies on a massive installed capital base of large-scale industrial assets,” Mr Jenkin says, noting that globally, steel is used 20 times more than all other metals combined.

Most carbon emissions from steel occur in China , which produces over one billion tonnes of steel a year [PDF · 1.7MB] in blast furnaces – and in 2021, China purchased over 70 per cent of Australia’s iron ore [PDF · 1.6MB].

Steelmakers face international pressure to change their carbon-intensive processes, and as the largest supplier of iron ore to China, Australia has a significant stake in how this change takes place, as any change in world steel markets will ripple through our own economy.

Already, major iron ore producers are working with CSIRO across a range of relevant areas to develop some of the key technologies that will help get steel to net-zero, from lifting ore grades, to hydrogen for energy and reduction to carbon capture, Mr Jenkin says.

“Australia has the world’s best iron ore resources and supply chains, highly innovative minerals processing expertise and some of the world’s greatest renewable energy potential – so we have a unique opportunity to reduce the emissions associated with steelmaking,” he says.

Hot and illuminated piece of steel

Global Steel grew on diet of Australian Ore

Warren Flentje is CSIRO’s Industrial Decarbonisation Lead, and says that a move towards ‘green steel’ is a priority for Australia.

“The global steel industry has grown up on a diet of Australian ore - we are the number one exporter of iron ore in the world,” he says.

“But as the world moves to green steel, Australia must change the way we perform our role in this process. We need to ensure that the material that we export is suitable for the new technologies and processes for making green steel offshore.”

The federal government’s own Low Emissions Technology Statement (LETS) [PDF · 28MB] – outlining Australia’s steps to achieve net zero emissions by 2050 – lists low emissions steel production as a priority technology.

The LETS aims for low emission steel production at under $700 per tonne (based on the marginal cost) – to be economically viable in the late 2020s, with its adoption throughout the economy subject to capital development cycles .

Australia’s national greenhouse gas emissions are around 500 million tonnes per year – but the downstream emissions associated with our iron ore exports, when converted into steel, are three times that – around 1500 million tonnes per year, he says.

“The green steel story for Australia, is not just about making green steel onshore here - but about our much bigger role in the international steel supply chain,” he says.

“We have both an opportunity to have a major emissions impact, as well as an opportunity to create more value in Australia and with our major trading partners, by developing new technologies or processes for converting our ore into the kind of feed that is suitable for the future steel industry.”

He says that by investing more heavily in pre-processing technology, Australia can also help reduce the emissions used in steel making in the near- to-medium term.

“CSIRO has a wide range of deep science capability in various areas relevant to support a global shift to green steel, which we are starting to bring together,” he says.

“From our research capability in iron ore characterisation and processing technologies and pathways, to energy systems such as hydrogen production using renewables, to our digital traceability technologies, to comminution - which is the grinding technologies for mineral processing,” he says.

These various technologies will apply at different stages of our transition to low-emission and then zero-emission steel production, he adds – and there are already applications for improved grinding technologies.

“Something like three per cent of the world's energy goes to smashing things into smaller bits,” he says.

Miners can make significant savings in energy, transport and waste costs by using renewable energy to pre-process minerals at a mine site, he says – and CSIRO’s resources research has made a big contribution to many of these processes.

CSIRO Projects underway

The scope of projects underway at CSIRO which will help to transition to net-zero or green steel is very broad; these include:

Direct support for Australian iron ore producers

The Carbon Steel Materials program within CSIRO Minerals Business Unit supports the Australian iron ore industry with laboratories and pilot-scale test facilities to improve product characterisation, processing, and physical/metallurgical assessment.

One example is sintering tests which help miners to improve the iron-ore content of their material, but also to advise on how the iron ore can best be processed.

Dry Slag Granulation

A CSIRO technology which is currently being scaled up to full commercial in China by industry partner MCCE, Dry Slag Granulation harvests blast furnace waste and converts it into a new product to make cement, reducing carbon emissions and water use along the way. 

The technology has been operating since 2019 producing 20 tonnes of product per hour, in a semi-industrial plant in China.

Self-sustaining pyrolysis

One of the challenges for green steel in the short term, is finding a replacement for coal in the blast furnace which can still sustain the reducing process.

Working with industry partners, CSIRO has developed a self-sustaining slow pyrolysis process to produce charcoal that can be tailored to steel and other metal production.

This process uses heat from pyrolysis reactions in biomass feedstocks within the furnace, lowering production costs and generating valuable by-products such as bio-oil and bio-gas. The current pilot-scale facility can produce up to 1000 tonnes of charcoal per year and can lower blast furnace emissions by two to three per cent.


CSIRO is a founding partner in the new Heavy-Industry Low Carbon Transition Cooperative Research Centre (HILT CRC), funded in 2021 with a ten-year commitment of over $200 million in government and industry funds.

Research engineer Dr Andrew Beath, who leads CSIRO’s Solar Thermal Applications team, will lead research in HILT CRC’s Process Technologies program, bringing expertise in modelling  solar thermal and hybrid biomass technologies for power generation.

Changing markets and the pre-production mission

With just two operating steelworks, the BlueScope Port Kembla Steelworks (producing 2.6 million tonnes of steel each year) and Liberty One Whyalla Steelworks (1.2 million tonnes per year) – most of Australia’s steel-linked carbon emissions occur in mining, pre-processing and shipping iron ore.

Keith Vining, CSIRO’s Group Lead for the Carbon Steel Materials research group, says that while our end-game is zero emissions steel, realistically demand for iron ore for established blast furnaces will continue for the next three decades – however the market is changing.

“Australia has several quite distinct iron ore resources, with most of our exports currently a hematite iron ore out of the Pilbara,” he says.

Mr Vining says that it is currently challenging to separate the Pilbara-sourced iron-bearing minerals from the ‘gangue’ or waste minerals, making the ore more expensive to process.

Other iron ore deposits include high-grade magnetite in South Australia – an ore that is more suitable for alternative steel processes such as Direct Reduced Iron (DRI) shaft technologies, which can use a gas-powered furnace rather than coal. 

“With demand for iron ore high, Australian exports thrived – but as the market shrinks, and there is more availability of scrap steel and our trading partners try to push down their carbon emissions, they will naturally gravitate towards higher grade materials which potentially reduces the export market for Australia,” Mr Vining says.

“There’s significant incentive for Australia to provide a higher-grade material so that we simultaneously protect our market share, we assist our partners in reducing their carbon emissions and we position ourselves for the future of steelmaking.”

All of these goals can be achieved by increasing the grade of material that we export, he says.

“Instead of exporting whatever we dig up, we are now exploring how we can process and be selective about our iron ore and turning it into a premium product, using renewable energy.”

CSIRO’s pilot scale agglomeration plant at Queensland Centre for Advanced Technologies, Brisbane. ©  Copyright Sky Avenue Photography & Design

Green Steel around the world

Around 70 per cent of steel currently produced globally is made in blast furnaces, where iron ore is layered with coke (super-heated metallurgical coal) in a blast furnace at around 1,500°C, creating liquid iron and slag (waste impurities). A further 25 per cent of steel is produced from scrap in electric furnaces.

Various emerging technologies promise to transition global steelmaking to a low-emission and eventually net-zero emission process.

Last year, Hybrit Development – a Swedish ‘green steel’ technology venture -  announced their first customer delivery of fossil-fuel-free steel, made in a renewables-powered hydrogen gas furnace.

HYBRIT (Hydrogen Breakthrough Ironmaking Technology) is currently trialling at demonstration scale but will shift to full commercial production in 2026, aiming to have a completely fossil-free steel making process in operation by 2035.

“Sweden produces around 30 million tonnes of iron ore per year, which is mostly high-grade magnetite with few contaminants, while Australia mines around 900 million tonnes,” says Mr Flentje.

“For green steel to have impact on a global scale, we need a solution for Australian ores.”

US firm Boston Metal has developed a promising carbon-free steel production process called Molten Oxide Electrolysis (MOE) which uses direct electric current to separate low- and mid-grade iron ore fines directly into high purity molten iron. 

The process is several years away from commercial application.

A December 2021 report by BloombergNEF notes that increased use of recycled steel would play an essential role in transitioning global steel production to net zero emissions, and estimated that additional technology investments could cost up to US$278 billion.

The report predicts that recycled steel would account for around 45 per cent of steel production by 2050.

BloombergNEF also claims that green hydrogen is in line to be the cheapest production method for steel by 2050, potentially accounting for around 30 per cent of the market, and the rest from a combination of older, coal-fired plants fitted with carbon capture systems, and potentially from electric arc furnaces powered by renewable energy.

Mr Jenkin points out that Australia can also make a significant impact by sharing some of our technology and emission-lowering strategies with large steel economies, such as India, which is the world’s second largest steel producer.

The recently-announced India-Australia Green Steel Partnership is a five-year program funding CSIRO research to support commercialisation of technology that will help reduce global greenhouse gas emissions in steel production and mutually benefit India and Australia.

“We’ve got a fair idea of the international landscape for green steel, and CSIRO also have a range of capabilities and technologies in this space,” says Mr Jenkin.

“We’ll be taking a portfolio approach; yes, we will probably make green steel in Australia at some point, but the biggest way we can move the dial on emissions from steel production, is to upgrade our iron ore and make it as high quality as possible,” he says.

“Let’s go for the big stuff, and fish for Marlin - we are the biggest iron ore exporter in the world, so this is how we can make the biggest impact in the most effective way.”

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