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5 MAY 2026
Welcome to our news round-up. See previous issues here.
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NEW REPORT: AUSTRALIA’S OPPORTUNITY TO LEAD IN GREEN IRON & STEEL AT RISK AS SECTOR RECALIBRATES GLOBALLY
Our new CEF report, led by Matt Pollard, tracking policy, investment and technology progress in the global green iron and steel industry warns that Australia's opportunity to leverage its comparative advantages to lead in low-emissions iron and steel production is narrowing, and time limited.
Australia’s policy response remains inadequate to capitalise on its unrivalled global #1 iron ore endowment – its largest source of export revenue – its world-class renewables potential, a large capital base of strategic, long-term capital, and trusted trade relationships with key Asian steelmaking markets.
The global context
A structural recalibration in global iron and steel value chains is taking shape, from speculative optimism and green hydrogen hype to incremental, halting and sporadic progress at a pace misaligned with the climate science. High upfront capital costs, low returns on capital, higher operating costs for electricity and renewable hydrogen, global steel overcapacity, limited consumer appetite for green premiums, a lack of regulatory pricing in of carbon pollution as well as insufficient market intervention to surmount low-emissions energy and infrastructure challenges create a “bankability gap”.
For every step forward, the report tracks a project delay, cancellation or restructure, with US policy backsliding undermining global capital momentum.
Globally electrolyser cost deflation outside China lags the pace anticipated, with global investment calibrating toward EAFs. EAF capacity under construction is 164% of the new BOF capacity pipeline – a positive directional shift, even as the pace is to-date insufficient to achieve climate targets.
Demand for DRI is expected to grow by 50% by 2035 and capacity under construction exceeds new coal-based BF capacity for the first time. However, without a significant stepchange in enabling policy and underlying energy dynamics, the vast majority of this new capacity will be fossil fuel-powered.
In the EU, despite billions in state aid funded by carbon pricing, and supply- and demand-side market forming mechanisms, the investment pipeline has contracted significantly. EU electricity prices remain 2-3x that of the US. EU methane gas costs are 4-5x that of the US, and a similar order of magnitude higher than in the Middle East and North Africa (MENA).
MENA is emerging as a strategically important DRI production corridor, with significant methane-based DRI capacity, and the largest development pipeline of new gas-based capacity. MENA’s competitive advantages include some of the world’s best renewable energy resources, low costs of capital, less stringent regulations and approvals than the EU, and proximity to Europe. MENA is the most credible near-term supplier of lower-emission iron to the EU, not withstanding the US war on Iran.
Despite 90% of China’s steel production deriving from BF-BOF pathways, it is the world's largest EAF operator by installed capacity. China is systematically building a few commercial-scale DRI demonstrations, expanding its emissions trading scheme (ETS) to cover steel in 2026, and positioning to scale green hydrogen and electrolyser manufacturing at a fraction of the costs of Western equivalents.
Australia’s challenge and opportunity
In Australia, over the past 24 months, we have seen the delay of POSCO’s Port Hedland Iron, the Whyalla Steelworks, Quinbrook’s Gladstone green iron proposal, the Australian Renewable Energy Hub and the cancellation of Fortescue’s Gladstone electrolyser precinct.
The report cautions that structural conditions that made the Pilbara in Western Australia the epicentre of iron ore globally and Queensland’s Bowen Basin the global epicentre in coking coal globally will not persist into low-emissions iron value-adding without urgent and transformative policy change. Australia became #1 globally in LNG in 2019, but only with public-private, Australia-North Asia collaborations and patient public enabling investments decades before.
The Federal Government’s flagship Future Made in Australia package has concentrated public support into supply-side incentives. Whilst this support provides a critical foundation, its time-limited nature fails to address the structural challenges facing green iron proponents in Australia. To kickstart a green iron industry in Australia, proponents must see a runway towards long-term demand growth, underpinned by an effective price on carbon in Australia and in our key trading partner economies in China, Japan, Korea and Southeast Asia.
The opportunity remains for Australia to leverage its advantages and transform its world-leading position in shipping rocks of iron ore into leadership in the burgeoning global green iron and steel marketplace.
This requires a significant change in political will, coordination and speed of execution, along with sustained investment in technology innovation. Equally important is a strategic approach to foreign investment policy and investment settings that capitalise on supply chain security risks in the Middle East, to attract bilateral and multilateral support for first-of-a-kind green iron production onshore.
The report concludes that while progress globally on steel transition is incremental at present, this remains a global race, and we need to be in it to win it.
>>> Read the full report
>>> See our media on the report including AusBiz, Canberra Times and 100+ mastheads via AAP, The Energy op ed, The Energy article, Renew Economy, FS Sustainability and Green Review.
>>> Read the Leaders Brief to PM Anthony Albanese and China President Xi Jinping from the Australia–China Senior Business Leaders Forum at the Boao Forum for Asia.
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TIME TO STOP PROPPING UP ZOMBIE WHYALLA & ACT ON AUSTRALIAN GREEN IRON & STEEL
The Whyalla Steelworks will be shut for at least 5 weeks as its decrepit end of life coal fired blast furnace is offline for maintenance again. It is beyond time that PM Anthony Albanese and SA Premier Peter Malinauskas stop wasting taxpayers’ money propping up this zombie, left in a festering mess by Sanjeev Gupta’s GFG Alliance, implement a greenfields solution to provide some of the existing workforce a path to a sustainable future, and accelerate progress on Australia's potential as a key player in the green iron and steel value chain.
Here is our 5 point action plan:
Whyalla administrators KordaMentha should be instructed that only absolutely essential maintenance and repairs be undertaken using public taxpayer monies at the totally dilapidated Steelworks. There is no justification for wasting more of the >$1bn of remaining allocated taxpayer monies on this basketcase, feeding GFG's lawyers and offshore vulture capital debt bankers. Assets of value like the port should be bought out of administration piecemeal, paid for using the public monies already advanced. Leave nothing for GFG's bankers.
How is it that GFG Alliance's InfraBuild steel manufacturing business has not been put into administration and the directors evaluated for trading while insolvent? There are reportedly >4,000 workers dependent on this business, as well as countless downstream industry players. Treasurer Jim Chalmers must direct ASIC to act; they are wilfully idle and failing to protect Australia's national interest. This could be a valuable business again, once freed of the offshore vulture fund debts Gupta racked up.
Industry Minister Tim Ayres should ask the National Reconstruction Fund to immediately seek and financially support a new firm to build a scrap steel and imported DRI-fed greenfield EAF in SA to leverage the state’s low cost but intermittent renewable energy. A long term 200-400ktpa DRI offtake agreement can be offered, underwritten by NRF as part of the equity investment, thereby helping derisk a first of a kind DRI or green iron facility in the Pilbara or Midwest WA. Part of this should also be to evaluate the potential for greenfield downstream steel fabrication.
Use ARENA and the Green Iron Investment Fund to fund semi-commercial new technology deployments such as those Calix Limited and Rio Tinto are implementing at Kwinana in SA. Think Element Zero and / or BIOCARBON AU and/or DryFlow Magnetics, and maybe another magnetite-fed Calix facility. All these can provide feedstock to the greenfield EAF.
Ignore the bleating and pork-barrelling of Santos, BlueScope and the gas cartel for yet more government subsidies to lock SA into imported methane gas for decades to come.
>>> See Matt Pollard's Whyalla Steel report.
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PM ALBANESE AND JAPANESE PM TAKAICHI SIGN ENERGY, CRITICAL MINERALS AGREEMENTS
Whilst gas diplomacy with Japan should not have been used to justify capitulating to the cartel on a 25% gas exports levy – see item below – CEF overall applauds the agreements achieved by PM Albanese with Japanese PM Takaichi this week.
We need to look after our national interests, work with all our key trade partners, and use our public-private bilateral agreements to co-invest, collaborate and partner in lower emissions value-added exports of what our key trade partners will need in the coming decades, ignoring fossil fuel lobbyists pushing their vested interests for more of the old. Lets hope Australia’s FMIA gets a boost from this, value-adding our critical minerals and strategic metals pre-export, ideally also creating demand for embodied decarbonisation at the same time.
The energy security agreement reached by Albanese and Takaichi reaffirms the two governments’ “commitment to strengthen energy security; support the flow of essential energy goods, including LNG, coal and liquid fuels between our two countries; and maintain stable and transparent engagement on the trade of energy products, while enhancing predictability and transparency regarding the investment environment.”
Importantly, the agreement confirms Australia and Japan’s mutual “commitment to diversify energy sources, including through supporting the energy transition and investment and cooperation in energy efficiency.”
On critical minerals, Ablanese and Takaichi announced the “elevation of critical minerals as a core pillar of our economic security relationship” and committed to “strengthening collaboration on investment and diversification of critical mineral supply chains, including through the Australia-Japan Critical Minerals Partnership, utilising public financing vehicles such as Japan Organization for Metals and Energy Security (JOGMEC) and initiatives such as Australia’s Critical Minerals Strategic Reserve, alongside measures to streamline regulatory processes.”
The leaders’ statement notes that the “focus will be on strategic projects to address the most urgent supply chain vulnerabilities in mining, refining and downstream manufacturing in Australia and Japan.”
The two governments have already identified a range of key projects. These include the Lynas Rare Earths Project, a collaboration between Sojitz Corporation and JOGMEC providing equity and loan financing for light rare earth production, with a milestone commencement in 2025 of heavy rare earth production. The Alcoa Gallium Recovery Project involves Alcoa working with Japan Australia Gallium Associates (JAGA) – a joint venture between Sojitz and JOGMEC – to develop gallium recovery at an Alcoa alumina refinery in WA for use in semiconductors, LEDs, and solar cells, with equity investment from the Japanese, Australian, and US governments. The Kalgoorlie Nickel Project is a JV with Ardea Resources, Sumitomo Metal Mining, and Mitsubishi with funding support from the Japanese government and conditional non-binding indications of support from EFA and the US EXIM. Ardea has been selected for the Australian government's investor front door pilot, which aims to streamline investor-government engagement.
We need to leverage bilateral cooperation and green energy statecraft to ensure value-adding of Australia’s strategic mining capacities and resources, otherwise FMIA will fall flat in implementation. We need to learn from Indonesia (refer item below).
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ALBO COWERS, SELLS OUT AUSTRALIANS, AS HIS GAS CARTEL BOSSES KILL OFF LEVY PUSH
Brow-beaten into submission, again. The Albanese government, quaking in the face of the gas cartel’s targeted lobbying campaign to prevent Australians gaining a fair share of the returns from extraction of our resources, has ruled out a proposed 25% levy on war-derived gas superprofits.
A 25% revenue-based gas export levy, called for by the ACTU, and backed by the likes of Commonwealth Bank CEO Matt Comyn, crossbench MPs, and shadow industry minister Andrew Hastie could deliver $17bn in additional public revenues in 2026-27 alone. This would redirect a portion of windfall profits currently flowing offshore to energy multinationals back into Australian coffers, supporting services here and providing desperately needed cost of living relief for hard-hit consumers as all Australians pay the price of the US/Israel war against Iran.
As reported in the SMH, former Shell executive and ex-Malaysian minister Idris Jala called out global energy giants’ scam arguments opposing reform, urging Australia to use the global energy crisis to tax windfall profits and dismissing the industry’s claims that it would scare off investment and jeopardise trade with Asian neighbours. “They [energy companies] will not leave the market. Believe me. That’s the noise they will make, but they will not leave.”
Nevertheless, at a time global LNG giants are making an extra $3bn monthly windfall profit from Australian LNG exports, the Albanese government has kowtowed to private, mostly foreign, loud, well-funded vested interests and allowed them to keep the vast majority of their war-profits to themselves, selling out Australians. The culprits laughing all the way to the bank include ExxonMobil, Chevron, BP, Woodside Energy and let’s not forget Japan's INPEX Corporation, which tells the Japanese PM what to say to look after INPEX's best interests as they profit from our sovereign gas.
A capitulation by the Albanese Government at a moment of opportunity, when it needed to act in the national interest as per its mandate.
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CHINA PARTNERS WITH INDONESIA ON ALUMINIUM, AS AUSTRALIA LETS ONSHORE PROCESSING OPPORTUNITIES GO BEGGING
Our recent CEF Report – "Raw Power: China locks-in global dominance of critical minerals and metals with US$120bn outbound investment surge” – focussed on China’s ‘going global’ strategy to secure the resources value chains underpinning zero-emissions industries, as it boosts partner economies.
China’s rapid expansion into nickel in Indonesia in the last few years led to a massive global oversupply, depressing prices. We applaud Indonesia's move to restrict excess supply, pushing nickel prices up significantly.
Now, as the FT reports, the huge Chinese majority-owned Shandong Nanshan Aluminium Co industrial park is reshaping Indonesia into a significant producer of alumina and aluminium, of which China is the biggest buyer globally. In 2023 Indonesia banned exports of bauxite, ensuring processing would happen onshore, enabling value to be captured pre-export, echoing what happened with nickel.
We note that it is not only Indonesia that is seeking a better share of the value-add of their resources pre-export. We see similar moves by Zimbabwe in lithium and Guinea in bauxite and iron ore.
CEF would suggest Australia's PM Anthony Albanese should seek a better share of the riches multinationals secure by pursuing colonialist style dig and ship extraction here in Australia. We should learn from Indonesia and ensure Australia's national interests are served by the likes of BHP, Rio Tinto, Glencore Australia et al.
>>> See Tim’s presentation at the Paydirt Battery Minerals Conference in Perth in April: YouTube video here; PPT presentation: China’s Growing Global Dominance in Battery Material Supply Chains: Australia’s path forward
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TURBOCHARGED BATTERY BUILDOUT A WATERSHED IN AUS ENERGY TRANSITION
Much as the Australian Fossil Fuel Review (AFFR), aka the AFR, can try to put a negative spin on it, Federal Energy Minister Chris Bowen’s Home Battery Scheme is a raging, roaring success. April 2026 was a record high, with total installs reaching 375,000 systems in just 10 months. The first tranche of the scheme of $2.3bn was completed by March 2026, and just a month later we have reached $3.3bn – $1bn deployed in battery support in just one month. Federal Treasurer Jim Chalmers put another $4.9bn into the scheme for a tranche 2 in MYEFO 2025.
We do caution that this scheme is worsening the intergenerational equity divide, given only home owners with rooftop solar can access this massive rebate – an issue that has been relatively neglected to date and needs serious attention. We need to see more investment in solutions for renters and apartment dwellers. And even more for social housing, like the 10,000 home energy upgrades noted by Assistant Minister Josh Wilson as a result of the Government’s Household Energy Upgrades Fund (HEUF).
However, the benefits to all Australians are already clear, as the AFR reported in its story Record battery growth is pushing power prices down: "The cost of generating electricity across Australia’s east coast fell by 12% in the first three months of the year as record levels of wind and solar, and the exponential growth of massive grid batteries, shrank the role of gas in the power grid."
One policy can't solve everything, but this one is building momentum and making Australia's electricity grid one of the highest penetration shares of variable renewable energy in the world: 46% in 1QCY2026, >50% share in 4QCY2025. Decarbonising the grid can be and is being done, we can align with the climate science, and Australia can lead the world in energy transition and free ourselves from our fossil fuel addiction, which keeps us vulnerable to energy crises like the one engulfing the world today.
In other words:
Renewable Energy is Deflationary.
Renewable Energy Builds Energy Independence.
Renewable Energy is the Path to a Liveable Planet, no matter the denialism and undermining of the climate luddites and fossil fuel vested interests, who have been proven wrong, yet again!
>>> Read our full post
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CAPACITY INVESTMENT SCHEME BACKS >2GW WA RENEWABLES SURGE
We applaud the announcement over the weekend of ten projects in WA which will deliver 1.9GW of new renewable energy generation and 482MW (3.7 GWh) of standalone battery storage under the federal Capacity Investment Scheme. This is exactly the kind of momentum building we need to see – strategic public capital underpinning an acceleration of the state’s new energy system buildout as older generators are retired. This announcement is a serious step up in decarbonisation commitments for WA. The winning tenders are:
Yathroo Wind Farm (420 MW), Neoen Australia in Yathroo
Narrogin Wind Farm (168 MW), Neoen Australia in Minigin
Kondinin Wind Farm (130 MW), Shell Energy & Foresight in Kondinin
Tathra Wind Farm (240 MW), Synergy Renewable Energy Developments in Eneabba
Waddi Wind Farm (108 MW), Tilt Renewables in Dandaragan
Parron Maam Marang Wind Farm (470 MW), Zephyr Energy (Atmos Renewables) in Hill River
Killawarra Hybrid Project – solar (350 MW) and storage (2,100 MWh), Trina Solar in Kadathinni
Collie Battery & Solar Hybrid Project (200 MW/1,518 MWh), Enpowered & Plenary Group in Palmer
Yathroo Battery (200 MW / 1,600 MWh) operated by Neoen Australia in Mimegarra
Waroona Renewable Energy Project – Stage 1 (82 MW / 565 MWh), Frontier Energy in Wagerup
This builds on the brilliant new $1.4 billion Clean Energy Fund by WA Premier Roger Cook and Amber-Jade Sanderson, Minister for Energy and Decarbonisation.
CEF is part of the WA coalition led by Jess Panegyres at Solutions for Climate WA urging the Cook government to now commit to a strong 75% by 2030 Renewable Energy Target for the state’s main grid that locks this momentum into a long-term vision for the state.
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OUR MEDIA |
See all of our media here.
OUR WORK |
See more of our latest work, including presentations on global decarbonisation and capital shifts.
PREVIOUS NEWS UPDATES |
Our previous newsletters covering major energy news can be accessed here.
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AJ for Tim, Matt and Fatima
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This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.
