Australia holds a comparative advantage in green iron production, particularly in Western Australia, with key locations such as Pilbara, Geraldton, and Kwinana poised to become major hubs for this industry.

Green iron is produced by combining iron ore with green hydrogen derived from renewable energy, offering a cleaner alternative to traditional steelmaking that relies on fossil fuels.

To capitalize on this opportunity, the government must address market failures by creating a competitive landscape for green products, supporting early investors with capital grants, and investing in essential infrastructure.

Proposed government support includes a production credit of approximately $170 per tonne of green iron and capital grants of 15-30 percent for early investors, aimed at encouraging investment and accelerating project development.

As major economies target net-zero emissions by 2045 to 2070, demand for fossil fuels is expected to decline, posing a financial threat to Australia’s economy, which heavily relies on coal and gas exports.

Australia is positioning itself to become a global leader in green iron production, which could generate nearly $400 billion in export income over time and significantly aid global decarbonization efforts by reducing about 4 percent of the world's emissions.

This emerging industry has the potential to support full employment and sustained economic prosperity in Australia, especially as traditional exports like coal and LNG, which contributed around $160 billion in 2023-24, face declining demand due to global net-zero targets.

The Prime Minister's recent visit to China underscored the strategic importance of green iron, highlighting its potential as the next major export boom and strengthening Australia’s position in the evolving Australia-China trade relationship.