Funds to Future-Proof Regional Steel Manufacturing
The future of Australian steelmaking is up as the federal government spends $200 million in grants to steelmakers and projects which will help transform the energy system and keep Australian producers internationally competitive while creating jobs. In the first round of the Powering the Regions Fund (PRF) has granted $136.8 million to BlueScope Steel in New South Wales and $63.2 million to Liberty Steel Australia in South Australia. BlueScope will put the funds towards relining and upgrading its No. 6 Blast Furnace at the Port Kembla Steelworks to maintain domestic production, reduce emissions, and support pathways to producing even lower-emissions steel. Liberty’s funding will go to the purchase and commission of a low-carbon electric arc furnace (EAF) to replace its existing traditional blast furnace at the Whyalla Steelworks. The new state-of-the-art EAF will support the manufacturing of green steel and help achieve Liberty’s aim of carbon neutrality by 2030.
The Minister for Climate Change and Energy Chris Bowen said the $200 million investment in the steel sector aimed to secure its long-term future. “Steel is essential for our energy transformation and there are multiple benefits of using local Australian steel companies. Ninety percent of the materials that go into making a wind turbine are steel and cement, and we are going to need a lot more of it. Total steel demand for the energy transformation from 2022 to 2050 will be almost 5 billion tonnes, accounting for 75% of the total material requirement – and that steel will increasingly be green steel.” The Minister said the government wants to make sure products vital to Australia’s economic future, such as green steel are made here, but this will require innovation (such as old tyres and boots used in steel manufacturing) and new ways of processing iron ore that decarbonise the steel industry. “Regions like the Illawarra and Whyalla have been industrial powerhouses for generations, making the steel used in building our houses, infrastructure and industry while creating jobs, and we want to see this continue.”
BlueScope will add about 250 workers to its site during the blast furnace upgrade 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 many existing employees with retraining and new skills in steel fabrication. Australian Workers’ Union National Secretary Paul Farrow said the AWU has long argued that Australia is ideally placed to become a global, green-steel powerhouse of the 21st century. “But to realise that exciting future we need strategic investment today. Thankfully that is what we are finally seeing through the government’s Powering the Regions Fund,” he said. “The decision to fund projects at BlueScope and Liberty is a testament to our nation’s readiness to embrace a clean steel future.”
Farrow said the transition is more than just an environmental imperative. “Sustainability is a buzzword in steel manufacturing and it is an economic opportunity for Australia to become a clean steel leader in Asia and globally. We tend to hear a lot of doom and gloom about manufacturing in Australia, but the fact is the future looks extremely bright if we seize our opportunities.” The two grants are the first under the PRF’s Critical Inputs to Clean Energy Industries program, which supports hard-to-abate sectors so Australia can keep making the things that are vital to the energy transition, including electricity and rail infrastructure such as wind towers, solar farms and energy transmission, and the construction of energy-efficient buildings using heat induction bending services. The Albanese Government 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.