Steel makers Bluescope and Liberty Steel Australia on Wednesday shared $200 million in federal grants from the debut of the Albanese Government’s $1.9 billion Powering the Regions Fund, with the latter’s grant to help manufacture green steel in Whyalla.
The fund’s first grants, made under its Critical Inputs to Clean Energy Industries program, will prolong the life of a Bluescope facility to ensure domestic supply of clean energy infrastructure, and backs Liberty Steel Australia’s ambitious green steel move to an electric furnace.
The $1.9 billion Powering the Regions Fund was an election commitment seeded by unallocated budget funding from the former government’s climate and energy funds in 2022. It aims to decarbonise existing industries, or to create new clean energy industries, and is a key plank of the government’s emissions reduction and green industrial policy plans.
A $136.8 million grant went to Bluescope to upgrade of its No. 6 Blast Furnace at the Port Kembla Steelworks, a change the government says will reduce emissions and “support pathways” to lower emissions steel making in the future.
Bluescope is Australia’s largest steelmaker and last year recorded net profit of $1 billion, down from its record $2.8 billion net profit a year earlier.
The company is relining and upgrading its blast furnace at a cost of $1.15 billion. The “bridge to the future” upgrade extends the life of the Port Kembla facility, allowing it to continue manufacturing flat steel product used in several renewable energy projects.
Bluescope also says it is exploring alternative low-carbon steelmaking methods, like its partnership with Rio Tinto on direct reduced iron technology, and has targeted net zero emissions by 2050.
“We clearly recognise that we operate in an emissions-intensive, hard-to-abate sector,” Bluescope’s Australian Steel Products chief executive Tania Archibald said.
“We are committed to decarbonisation, but we can’t lose our sovereign steel-making capability in the process.”
The other grant from the Powering the Regions Fund was for $63.2 million and went to Liberty Steel Australia for its acquisition of a new electric arc furnace at its Whyalla plant, which is on a more ambitious decarbonisation mission.
The new furnace replaces the old coke oven and blast furnace that were shut down last year, with the company aiming for carbon neutral steel making by 2030.
The chairman of GFG Alliance, which owns Liberty Steel, Sanjeev Gupta, last year said the new furnace could reduce the Whyalla steelworks’ emissions by 90 per cent by 2025 and work would begin on it by April.
Climate Change and Energy minister Chris Bowen said the government was committed to ensuring domestic supply of steel and was comfortable supporting companies on different emissions reduction timelines.
“Both Liberty and BlueScope are on different journeys, but they have the same destination – and that is decarbonisation. And we’re supporting both of them in those efforts,” he said.
“And what we don’t want to see and what we won’t let see is other countries making steel without the sort of carbon constraints that we have in Australia and Australian competitiveness being impacted… green steel is coming, but it’s not here yet. And we need to work in partnership as we get there.”
Green steel is one of four priority areas in the Albanese government’s upcoming green industrial policy reboot.
The Powering the Regions Fund has also set aside $200 million from the Powering the Regions Fund for other hard-to-abate cement and lime and alumina and aluminium sectors. Successful projects are expected to be announced in the coming months.
