Weekend Edition: Can Australian exports iron out climate woes?
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What is Australia’s current role in fossil‑fuel exports and why does it matter for climate?
As a major fossil fuel exporter, Australia has done its bit towards the problem of climate change. But do we have the natural resources like the sunshine, for example, to help mitigate against it? In particular when it comes to iron. Not just any old iron. Is green iron Britain's big export opportunity? It seems like it, but can we get there without the government spending a lot of money on it? This week on the morning call weekend edition Well, we know Australia is well placed to take advantage of green energy, even if as an economy we've been very reliant on fossil fuels, so coal, gas, and oil still account for about a third of our exports. Then you can add another quarter for iron ore, and of course turning iron ore into steel is one of the most carbon intensive processes there is, and it might be responsible for as much as ten or eleven percent of the world's carbon emissions.
And can we really become A major exporter of renewables when there's still money to be made from the non-renewables. Well, economists Roscano and Rod Sims, Rod who for eleven years was chair of the ACCC but has had many years beyond that in public policy roles, they got together a couple of years ago. And formed the Super Power Institute. Rod is their chair and he joins me now. So Rod, I mean if we're looking for labels, the Super Power Institute, which it's a think tank, I guess, isn't it? Oh, that's exactly what it
is, Phil. Uh it's uh philanthropically funded. It's not for profit, uh, but it is a think tank. It's uh all about doing research, gathering facts and getting them out there to the public, but it's deeply research based. The people we employ, um, in many ways, most of them come from academia. They are uh research economists, so
very
much a thing
tank. You got it right. And the aim is to try and influence government policy around renewables. That's the agenda.
Um yes, let me refine that a little. The agenda is to advance knowledge and interest in the fact that Australia uh can be uh uh uh an energy uh a superpower, uh in the sense that We have some of, if not actually the best solar and wind resources in the world, we have an almost endless supply of them at very low cost. Uh we have a lot of land to put them on, and we have also the ability to have a lot of sustainable carbon, um, biomass, planting trees, chopping them down again, turning them into carbon where you need carbon. So we've got w you know, just as we've got a fantastic position in coal and gas, actually we've got a fantastic position in solar, wind and biomass. So what that means and and the superpower's focus is not on domestic decarbonisation.
That is not what we're focused on. It's purely on the fact that Australia can Export a whole range of green energy products. And if I could just deviate a little bit to explain. Um in the fossil fuel world. You make iron by mixing iron ore. With uh metallurgical coal or coking coal. You heat it up with fossil fuels as well, and you turn the iron ore into iron. Uh now that all works and is done. I mean, using so so we export the iron ore. We're the world's biggest exporter. of uh metallurgical coal or coking coal and uh we obviously export the the gas and the thermal coal to do the heating and we send all that to China, chip Korea and Japan, and they turn all of our products into iron and then steel. And that's logical because the cost, and this is the key point, that the cost of
exporting gas and thermal coal and metallurgical coal is very small. So if you can make uh you know, get thermal call. ready for use uh in Australia, it would only cost ten percent more to send it to China or Korea or Japan. And so what we're doing now is completely logical. Um uh much better, much more economic to have the iron, metal and the steel made in China, Korea and Japan because they'll do it at a massive scale and they're close to market. Now what happens in the green world Is that to make iron? Instead of using fossil fuels for the heating, you use solar and wind, and instead of using coking coal uh to reduce the iron ore to iron metal, you use hydrogen.
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Chapters
5 chapters
1
What is Australia’s current role in fossil‑fuel exports and why does it matter for climate?
0:01–5:49
2
How does the Super Power Institute define its mission and why is it relevant to green iron?
5:49–9:33
3
What is green iron and how could Australia produce it using solar, wind and hydrogen?
9:33–16:13
4
How do the economics of green iron compare with traditional iron‑making and what price gap exists?
16:13–25:21
5
Why is China’s attitude crucial for Australian green‑iron exports?
25:21–28:29