A new report suggests using Australian iron ore and hydrogen to manufacture steel onshore.
A new report suggests using Australian iron ore and hydrogen to manufacture steel onshore.

What a plan for billion dollar steel industry means for CQ

A plan to develop a multi-billion dollar steel export industry could give Central Queensland coal workers a viable employment alternative.

The Start with steel: A practical plan to support carbon workers and cut emissions report from the Grattan Institute explains how green steel is made using hydrogen to replace metallurgical coal to reduce iron ore to iron metal.

Energy Program director Tony Wood said well-paying manufacturing jobs would be more attractive to coal workers than previous suggestions such as tourism development.

"Our practical plan could be a win-win-win: it would create a new export industry, support carbon workers, and cut emissions," he said.

"Most people would accept that we need to have a contingency plan if people start using less coal.

"Whether it happens faster or slower, Australia will be in a much better position if we have a plan to take advantage of the opportunity as it emerges."

The global appetite for steel is considered more secure.

Gladstone is well positioned to play a role in the development of the industry.

Mr Wood said solar energy infrastructure could be built to the west and electricity brought to the coast where there was water.

Pilot plants that use water and electricity to produce hydrogen have already been slated for the region.

"Then you have all the other infrastructure that Gladstone has like access to the electricity network, the port and the workers," he said.

Capturing about 6.5 per cent of the global steel market would generate about $65 billion in annual export revenue and could create 25,000 manufacturing jobs in Queensland and NSW, according to Grattan Institute numbers.

'For too long, adding value to Australia's energy and minerals resources and creating sustainable jobs through manufacturing and exporting have been the stuff of dreams,' Mr Wood said.

As well as Australia's iron ore reserves and renewable energy resources, a critical part of the plan's success is the price of hydrogen and how much green steel would cost compared to steel made using coal.

Wind and solar energy resources are an asset for making hydrogen, and therefore green steel, cheaper than countries such as Japan, Korea, and Indonesia.

The federal and Queensland governments have been active in pursuing a hydrogen industry, and Mr Wood said the cost could fall substantially within the next decade.

He noted that shipping hydrogen to foreign markets was expensive and it made sense to use it where it was produced.

To build skills and capability in low-emissions steelmaking in the next decade, the report suggested the Federal Government help fund a 'flagship' project.

This could use hydrogen from WA's low-cost gas to make steel with lower emissions than coal or help modernise the steel plants at Port Kembla or Whyalla and sustain existing jobs.

It also recommended investigating suitable areas for the geological storage of hydrogen, co-ordinating land-use planning and regional development as well as helping workers to retrain.