A think tank reported on Friday that top global iron ore exporter Australia could lose as much as half its revenue from the sector if it fails to start producing green iron fast enough, as other countries start making steel using renewable energy.
Iron ore is Australia’s biggest export earner, but so far, progress has been slow in developing green iron in the country.
Australia stands to lose approximately A$69 billion ($45 billion) annually in revenue from the sector as global steelmakers decarbonize, including in China, and restructure their supply chains, according to a report from Sydney-based Climate Energy Finance, said in a report by Reuters.
If Australia manages to position itself as a leader in green iron, it could potentially double its current revenue to A$250 billion a year.
To avoid what could be “devastating economic consequences,” Australia needs “a suite of strategic national-interest policy and investment incentives to kickstart a green iron export industry,” the report said.
According to government figures, Australia accounts for 56% of seaborne iron ore trade.
Climate Energy Finance recommended that Australia should develop a clean commodities trading company with South Korea and Japan, and the government’s Future Fund should provide A$20 billion to enable green metals processing.