30 JULY 2026

Welcome to our news round-up. See previous issues here.

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NEW CEF REPORT: GREEN STEEL PIVOT NEEDED NOW TO BUILD FUTURE MADE IN AUSTRALIA AS $120bn IRON ORE EXPORTS AT RISK

Our new report released today, Arc of Ambition, calls for urgent strategic action to build an onshore green steelmaking industry as a national-interest policy priority. 

It recommends a National Iron and Steel Decarbonisation Strategy, a Carbon Border Adjustment Mechanism (CBAM), and timely strategic public capital investment in low-emissions steel capabilities to position Australia in global iron and steel supply chains.

The global steel sector is irreversibly transitioning away from highly-polluting fossil fuel-based production. This presents a major near-term opportunity for Australia under the federal government’s Future Made in Australia (FMIA) vision for green manufacturing – to build electric arc furnaces (EAFs) that use electricity powered by renewables to produce steel at a fraction of the emissions of coal-fired blast furnaces, also creating potential demand for future green iron production.

Australia has scope to construct EAFs in Collie, Western Australia; Whyalla, South Australia; and greater Brisbane, Queensland, as soon as next year. This would unlock billions in investment, support large-scale new firmed renewable-energy capacity and create new regional employment opportunities. (Greensteel’s Newcastle, NSW, proposal does not include an EAF in its initial phase.)

Australia is world #1 iron ore exporter, and supplies half the world’s exports of iron ore and coking coal used to make steel. Yet as major North Asian partners including China decarbonise their steel industries, Australia’s export dominance in higher-impurity, lower-grade Pilbara ore – which is less readily suited to steel decarbonisation – is increasingly at risk. 

CFE calls for a Green Energy Statecraft approach to low-emissions steel industry development that aligns public institutions and private investment, addressing the structural barriers to the current economic viability of green and low-carbon steel for project proponents, and building the industries, like green steel, that underpin future prosperity and national resilience. 

Key to this is pricing the embedded carbon in industrial commodities via a CBAM. In 2024, steelmaking as a sector generated 9.4% of global CO₂ emissions – a carbon footprint surpassed only by China and the US’ national emissions. Steel decarbonisation is the world’s largest emissions-reduction opportunity outside electricity.

Report lead author Matt Pollard, CEF’s Head of Research, said: “Domestic statecraft to build Australia’s EAF-based low-emissions steel industry would allow government to build expertise in coordinating investment, aligning common user infrastructure, supporting critical supply chains, enabling skilled workforce development, and adapting policy. 

Absorbing lessons from Australia’s key north Asian trade and investment partners, it is clear entrepreneurial state capabilities cannot be fully designed before the event. Rather, effective Statecraft emerges through iteration and close engagement with industry. Australia has a significant opportunity to mobilise private capital and progress the clean metals investment pipeline through EAFs, putting runs on the board for FMIA, securing sovereign capabilities in critical national security manufacturing, decarbonising a major pillar of value-added industry, and developing institutional capacity.”

UNSW Professor Liz Thurbon, Director of the Green Energy Statecraft Project, author of the report’s foreword said: “Building entirely new industries depends on governments making strategic projects bankable. In practice, this means coordinating investment, infrastructure, finance, procurement, regulation and skills around a shared long-term national ambition – a Green Energy Statecraft approach.

The great strength of this report is that it connects Australia’s resource and renewable-energy endowments with a practical pathway for industrial renewal in the iron and steel sector. It demonstrates how strategic investment in low-emissions steel can revitalise regional communities, crowd in private capital, stimulate renewable energy development and strengthen sovereign manufacturing capability. More importantly, it shows how the right governance, financing and institutional arrangements can turn that opportunity into bankable projects.”

>>> See the full report.

>>> See coverage of the report via AAP in Canberra Times and syndicated to 100+ mastheads, ABC Radio Newcastle, ABC Radio Illawarra, The Energy, PV Magazine,  FS Sustainability’s podcast, airing Tues 4 August (preview here), Spark Club podcast, Matt’s op ed in Renew Economy with an op ed by Prof Liz Turbon forthcoming in Pearls & Irritations on Monday 3 August.

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EPIC FUEL SECURITY OWN GOAL AS FEDERAL & WA GOVT’S BACK NEW OIL REFINERY

The Federal and WA governments' decision to finance a new $4m prefeasibility study into a new oil refinery is a massive own goal, one that will do nothing to build Australia’s energy security in the short or medium term.

A plant would likely cost >$10bn and not be operational for 5-10 years. It would actually undermine Australian energy security by locking in our dependence on imported fossil fuels for many decades to come, also undermining our energy system transformation, which needs to be accelerated in line with the climate science. 

The refinery aims to process crude oil, but given our declining domestic oil reserves, this will do very little to improve energy security and independence. Rather we will remain locked into our current reliance on imports of diesel and oil from the Middle East. It might reduce our reliance on intermediate processing from Malaysia, Singapore, China and Japan, but when the Middle East oil supply chain is cut, we will be in the exact same position, facing national security risks.

We need to permanently remove our reliance on imported expensive, hard to secure fossil fuels by investing in electrification and decarbonisation technologies. The government funding to underwrite this should be deployed in enabling the zero emissions technologies of the future, starting with electric vehicles - EVs for passenger transport, for buses and delivery trucks, for interstate freight haulage and for electrification of our world leading mining sector. 

Critical to this is reforming government policies like the Safeguard Mechanism to drive private capital at speed and scale into decarbonisation of our industries by forcing carbon polluters to pay.

We need to stop providing a A$11bn annual subsidy to imported diesel, which keeps the mining industry addicted to foreign oil, and instead pivot to incentivising the rapid electrification and decarbonisation of our transport, freight and mining sectors. 

The Boao Forum in Perth earlier this week (see China item below) highlighted the huge opportunities for Australia to collaborate and partner with aligned countries such as China, to jointly build out our involvement in low emissions industries of the future. The seniority and breadth of the Chinese delegation speaks to the depth of commitment by China to driving industry electrification and decarbonisation, and the enormous investment, net export and employment opportunities for Australia in joining it in this globally critical race. China has this week shown us the path forward in collaboration and co-investment, but the Australian government seems bizarrely unable to listen to this message.

In this context, the Australian government’s oil refinery folly amounts to putting Australia in reverse gear on electrification and decarbonisation, even as it weakens our national security by making us dependent on foreign fossil fuel supply chains.

Australia is at severe risk of allowing the US war on Iran to be an excuse for decelerating permanent solutions available now. Vested fossil fuel interests are yet again undermining Australian national interests. Why are we wasting yet another global energy crisis and not investing full speed in the obvious solutions? 

>>> See Tim quoted on this issue in China Daily.

>>> See TSI’s new report on How Australia Can can Break its Foreign Fuel Dependence and Climate Integrity’s report on how the diesel rebate undermines the Safeguard Mechanism 

>>> See CEF analysis quoted in AFR on the diesel tax rebate: ‘Message to the haters’: Chalmers gets cover to cut diesel tax rebate’

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LIBERTY BELL TOLLS, GUPTA GRABS THE CASH AS WORKERS LOSE THEIR SHIRTS

This month the administrators of Liberty Bell Bay in Tasmania, Australia’s only domestic producer of manganese alloy, a critical input into steelmaking, advised LBB staff that the business will be wound up.

LBB was owned by Sanjeev Gupta’s exceptionally financially distressed GFG Alliance. In March 2026 it went into administration. In April, the federal and Tasmanian governments announced a joint $3m loan to maintain the workforce while administrator EY conducted an expedited sale. This was on top of a loan of up to $20m provided by the Tasmanian government in 2025, supposedly tied to the purchase of manganese ore to facilitate a promised restart of the smelter. GFG Alliance defaulted on the loan and operations did not restart. Over 200 workers have lost their jobs - a devastating blow to a region.

Now this news, as reported in AFR: “The administrators of the Liberty Bell Bay manganese smelter in Tasmania have told creditors that the company’s previous owner, one-time British industrialist Sanjeev Gupta, loaned $191 million to his other businesses, and they expect there is almost no prospect of recovering that money".

How many times do we need to be reminded that knowingly trading while insolvent means directors and officers are breaking Australian corporate law. Where is ASIC? Can someone wake them up, please? Where is the accountability? Treasurer Jim Chalmers and Finance Minister Katy Gallagher – please give ASIC a nudge to do their job. Blue collar criminals go to jail, for years or decades. This is white collar crime that is costing Australian taxpayers billions. Think $2.5bn of taxpayer damage in the form of bailouts thanks to Gupta’s egregious mismanagement of Whyalla Steelworks alone, as it was run into the ground and everything – even if cemented to the floor – was hocked to the eyeballs.

We are repeatedly gamed by a foreign taxhaven based scammer who the Serious Fraud Office (UK) has been investigating for years and years for “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group (GFG) Alliance". 

CEF also advocates for ASIC to evaluate the ‘going concern’ of GFG’s InfraBuild. This strategically valuable steel business employing 4,600 workers needs to be returned to financially stable, ideally Australian ownership.

The privatisation of the profits and socialising of costs is out of control and is evidenced in the merry-go-round of taxpayer bailout of Australia’s privately- and mostly foreign-owned refining facilities, including Rio Tinto’s Tomago and Boyne aluminium smelters in NSW and QLD, Nyrstar’s zinc smelters in SA and Tasmania, and Glencore’s copper refinery in QLD. We need to see more public benefit attached to any new bailouts, including decarbonisation / PPAs for renewables / public equity ownership / a share of the profits / commodity price upside.

This gouging of the public purse for smelter rescue packages now totals nearly $10bn since 2024.

>>> In our new report Arc of Ambition (see above), we propose a way forward out of the bailouts cycle, based on Green Energy Statecraft. See the chapter on bailouts here.  

>>> See Emeritus Prof Roy Green’s excellent article in Pearls and Irritations: Inaction on Tomago is a price Australia cannot afford

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CHINA SPOTLIGHT

Boao Forum Perth – The Next Phase of Green Industry Cooperation

The Boao Forum for Asia in Perth this week – Asia’s Davos – co-hosted by Andrew Forrest of Fortescue, convened senior Asian leaders from government, business and academia to examine The Next Phase of Green Industry Cooperation, and Tim was there. The Forum addressed how we strengthen regional cooperation, improve energy security and accelerate the deployment pathways for large scale green technologies and industries. It featured wide consensus on the critical need to tackle the challenge of the climate crisis by accelerating energy transition, and the opportunities for multilateral collaboration, including between Australia and China.

CEF was honoured to speak in Session 4: Future green energy enabled industries and market creation.

Delegates' remarks ranged across the imperative to solve climate change, to diesel subsidies to the potential for a domestic green iron via Green Energy Statecraft.

Liu Zhenmin, China's Special Envoy for Climate Change remarked that: “We are all obligated to address this critical issue. Climate crisis a profound threat to humans. Cascading impacts. We must accelerate mitigating actions with urgency. One country’s withdrawal undermines global confidence, even as we hope they will return to the table. The Paris Agreement is not perfect, but it is the common ground needed to overcome these joint difficulties. Global energy security has been threatened by the war on Iran. Stable energy supply is key to sustainable economic growth. Sun and wind supply is a domestic resource and safeguards energy security and enhances energy systems. Multilateralism and the success of COP31 is key”.

Zhang Jun, Secretary General Boao Forum for Asia said that: “The Asia-Pacific region is home to the largest population affected by climate disasters. At the same time, the region continues to make significant contributions to global greenhouse gas emissions. We explored practical cooperation that can help address climate change and reflect Asia’s realities and regional characteristics.”

Andrew Forrest noted that: “Countries should even the playing field and stop subsidising fossil fuels. Why does the Australian government subsidise miners $200/t to pollute then charging them just $35/t to not do so under the Safeguard Mechanism’; while Fortescue CEO Dino Otranto emphasised that “Building one of Australia’s largest privately owned energy networks, we could not do it without our Chinese supply chains. No company, no country, can do this alone. Hence the foundation of this conference is cooperation and collaboration.”

Assistant Minister to the PM Patrick Gorman said: “The collective responsibility that inspired this forum is critical. Every nation has a responsibility to act on the existential challenge of climate change. Some falsely claim it is a choice. The truth is that prosperity and climate action go hand in hand.”

Oliver Yates, Advisory Chair The Green Energy Statecraft Project, reflected: “How do we combine the strengths of China and Australia to take us to the next phase of this relationship by exporting low emissions iron, rather than iron ore. China can provide the energy equipment, the finance and offtake. We currently suffer a failure in terms of how we allocate risk. We need long term offtakes and pricing of carbon emissions. FOAK risks are high, and governments need to play a key facilitating role needed to solve this. Green Energy Statecraft would see both countries sharing this risk.”

>>> See Tim quoted in Xinhua Roundup: Green pioneers explore path, partnership at Boao forum Perth conference

China energy update: Electricity sector decarbonisation moderates after record 2025

Despite the reported 2QCY2026 GDP slowdown to 'just' +4.3% yoy growth, China’s economy remains solid in the face of Trump’s war on Iran – Electricity demand grew +4.9% yoy in the month of June 2026. Total electricity demand grew +5.5% yoy YTD June 2026.

Solar generation is now the #2 fuel source at 13.4% of China’s total 1HCY2026, and up 22.6% yoy YTD, ahead of wind at 11.5% share, with wind generation up just +0.6% yoy YTD.

Coal power generation still dominated at 54.2% share in 1HCY2026, and given total demand growth is still strong, coal power is +3.1% yoy YTD (+0.8% yoy for the month of June 2026).

The pace of capacity expansion has slowed in 1HCY2026 relative to the frenetic rate of 1HCY2025. 

China added 38.4GW of net new thermal capacity in the first half, an unsustainable +49% yoy. The thermal capacity utilisation rate fell to a record low 43.2% in 1HCY2026 (down from 44.5% in 1HCY2025), but this is cold comfort. Thermal progressively losing market share is not the solution; we need zero emissions generation to grow more than the total electricity demand grows, each and every year, as it did for the first time in CY2025 (-0.8% yoy).

China added 72.1GW of new solar in 1HCY2026, 66% less than in 1HCY2025, although the pace of decline slowed to -13% yoy in the month of June 2026.

China added 38.6GW of new wind in 1HCY2026, 25% less than in 1HCY2025. June 2026 saw 13.6GW of new wind added in the month, suggesting a more balanced wind-solar ratio is underway after the solar boom of 2025. Including 6GW of new hydro capacity, total renewables capacity added in 1HCY2026 was 116.7GW, 74% of total capacity added (76% including nuclear).

China's government has set a target of increasing the installed capacity of battery storage to 300GW by 2030, although this looks very conservative given China's installed capacity has doubled annually in recent years, reaching 140GW by 2025. Ember has released a new China BESS report examining battery trends.

>>> For further details including other China energy sector development over June/July 2026, see our CEF China Monthly Energy Update.

>>> See Tim quoted in FT, Australians ‘going gangbusters’ on Chinese batteries in renewable energy shift 

>>> See Tim’s posts on China’s extraordinary leadership in EVs, on its record high cleantech exports in June 2026 of US$26.7bn and on its battery boom.

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SEOUL DECARBONISATION FORUM HOSTED BY WEF PAINTS WAY FORWARD

Earlier this month, Matt Pollard, CEF’s Head of Research, attended the Decarbonisation and Circularity for Industrial Growth and Competitiveness forum in Seoul, South Korea, co-hosted by World Economic Forum and the Global Green Growth Institute. 

Across the forum, key themes included the following: 

• Industrial competitiveness and decarbonisation are intertwined. Low carbon commodity and technology production, resource efficiency, and circularity are sources of economic advantage and growth.

• Demand signals are a key pillar in unlocking investment. Coordinated commitments from buyers, governments, and investors reduce risk and accelerate deployment.

• Regional cooperation is a competitive advantage. Green trade corridors, aligned standards, and integrated value chains are essential to building competitive low-emission industries.

• Circularity and decarbonisation are strongest when pursued together, strengthening resource security, productivity, and industrial competitiveness.

South Korea’s Ministry of Economy, Trade and Industry emphasised that the government sees decarbonisation as an imperative – not as a cost but as an opportunity to capture new market leads and competitive advantages across industries. Their view is industrial emissions are a significant component to national emissions. As such, achieving NDCs requires comprehensive, coordinated policy statecraft to support industry decarbonisation. To facilitate this, government policies must:

1. Incentivise board investment via statecraft that combines supply-side, demand-side, and transition financing instruments to support the transformation of manufacturing to net zero. This includes financing early-stage research, development, and demonstration and providing the minimum necessary financial support needed to crowd-in private capital.
2. Provide clear, transparent and actionable data and information to industry across energy and emissions, as well as support institutional capacity building to improve monitoring, reporting and verification of embodied emissions in traded commodities.
3. Support the supply of low-carbon feedstock and infrastructure to enable the adoption of low-emissions production pathways.

This reflects the emphasis and approach in CEF’s Arc of Ambition report released this week.

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ONCE AGAIN, FIRMED RENEWABLES ARE LEAST COST PATHWAY, SAYS CSIRO

Firmed renewable energy is the least cost path forward for Australia concludes the CSIRO GenCost FY2026 report. Including the externalised cost of carbon pollution only makes this conclusion even more pronounced.  

The key findings from the 2050 analysis are:

• For the electricity sector to efficiently support achieving net zero by 2050 across the economy, solar and onshore wind will deliver the majority of electricity supply (93%) supported by hydro, storage, transmission and either gas or hydrogen or a combination of both.

• New black coal, while competitive at the system levelised cost of energy (SLCOE) range, is not suitable for deployment if the goal is to efficiently achieve net zero. Coal would increase the cost of achieving net zero across the economy. And investors will not fund new coal power regardless.

• The SLCOE analysis indicates gas will play a role in achieving net zero emissions contributing a 3% to 7% share of generation.

• Some offshore wind is also in the competitive range however the modelling used the average cost of offshore wind. Australia needs to get our infrastructure construction costs down and optimise financing and supply chains plus value NZE explicitly if offshore wind in Australia is to play any role, given it is twice the generation cost of onshore wind.

We need to look at the value to the system of different types of generation, not simply the cost.

And we need the Safeguard Review later in 2026 to widen the scope to include the electricity sector so that we level the playing field of renewables vs thermal power and give greater certainty of coal plant closure timetables.

Consumer Energy Resources are a key to lowering total costs to all, given they are fast to deploy, leverage the existing grid distribution system and defray new capex costs. This is being demonstrated real time with the brilliant Cheaper Home Battery scheme, accelerating rooftop solar deployments to a record high 4GW pa in 2026. Let’s also build out community batteries and get ARENA to unlock the commercial viability of EV vehicle to grid (V2G) technologies to enhance our grid demand and supply, and VRE integration.

An excellent review by Ben Potter at The Energy highlighted the report’s findings that wholesale prices in the NEM are expected to be too low to justify investment in most new generation technologies — bar solar and batteries — over the four years to 2030.

Minister Chris Bowen's Capacity Investment Scheme (CIS) & Electricity Services Entry Mechanism (ESEM) need to recognise the reliability value wind generation brings to the system, rather than looking just at the base generation cost. Low electricity prices in the middle of an ongoing fossil fuel war by the US on Iran – what a profoundly different world we have in 2026, so much stronger and better prepared than back in 2022/23 when Putin invaded Ukraine. Now we need to build the system of the future, at a price sufficiently viable for developers and super funds to unlock capital at the scale and speed needed. 

>>> See Tim on ABC re how cheap solar can help Australia become more than a dig and ship economy.

>>> See Tim on Australia’s renewables transition on Channel 9 news, NSW Approves $1.8 Billion Hunter Renewable Energy Project and ABC QLD Australia’s Renewable Energy Transition

>>> See our op ed in Renew Economy, Coal closure plan urgently needed as unreliable clunkers push power prices through roof

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