Several participants at the workshop regarded the creation of an Australian Clean Commodities Trading Initiative (CCTI) as a “strategic imperative”. It would use government-backed offtake contracts to guarantee early buyers for green iron, ammonia, steel or SAF, separating the physical commodity from its “clean” attributes.83 These attributes become tradable clean commodity credits – innovation credits that mandate cleaner production and reward first movers. By absorbing regulatory risk and providing price certainty, the CCTI would make projects financeable, mobilize private capital and create a secondary market for credits, thereby stimulating demand and driving innovation. The concept requires credible standards and life-cycle accounting to facilitate certification and tracking of clean commodities. Trade in those commodities is then boosted by attaching a recognized, fungible certificate or credit that proves the product meets environmental benchmarks. This reassures buyers in different countries that a tonne of “green ammonia” or “green HBI” carries a verified level of low-carbon attributes (see Box 9). Examples of such instruments include: book-and- claim systems (see Chapter 4.3) and the EU’s Carbon Border Adjustment Mechanism or CBAM (see Box 11). Proponents argue that CCTI-backed long-term offtake agreements for green iron and steel can bridge the green premium and make the transition economically viable while markets for green steel get established. This would make a decisive difference to plants such as the Whyalla Steelworks, by creating the revenue certainty its new owners and financial backers need to commit to major capital investments in green technologies. The Australian government – along with others in the region such as Japan and Singapore — has initiated various instruments to boost domestic and international trade in low-carbon commodities and power, including a guarantee of origin scheme and a hydrogen production tax incentive (see Box 9).Clean commodity trading instruments Australian government’s Guarantee of Origin (GO) scheme BOX 9 This voluntary scheme was passed into law in late 2024, as part of the Future Made in Australia legislation. It aims to attract investment in low- carbon products and power by encouraging businesses to apply for “product GO certificates” or “renewable energy (REGO) certificates”, which detail emissions intensity and low-carbon attributes. Initially covering renewables and hydrogen, the scheme will expand to cover liquid fuels, green metals and renewable gases. Certification provides buyers and consumers with confidence that products are certified against objective and credible standards. Sources: see endnote.84 Bridging the green premium with carbon pricing or production incentives There were strong calls from workshop participants to address the “elephant in the room” – the substantial gap in production cost between Australian green iron and the widespread carbon- intensive iron available on the global market. One of the keynote speakers, a senior Australian economist, argued strongly in favour of introducing carbon pricing. Failing that, he said the government should provide a tax credit to produce green iron, to simulate the effect of a carbon price. While described as “politically volatile” by some, most industry representatives and financiers at the workshop broadly supported the idea of a green iron tax credit. There are precedents, including the existing hydrogen production tax incentive (set at AU$2 per kg) and the critical minerals production tax incentive, due to provide a refundable tax offset of 10% on eligible costs from 1 July 2027.85 Either approach – whether taxing carbon-intensive production or incentivizing low-carbon alternatives – would perform two vital roles: –Reflect the external cost of emissions in production economics. –Level the playing field between green technologies and carbon-intensive alternatives. In its May 2025 report, A Green Iron plan for Australia, The Superpower Institute – a Melbourne- based thinktank – puts a price on a possible production tax credit. The institute notes that the value of any tax credit should mirror the anticipated EU carbon price in 2030 of $155/tonne, resulting from implementation of the CBAM. It then estimates the minimum cost of green HBI (flexible) produced in South Australia’s Eyre Peninsula at $668/tonne, compared to the average production cost of $554/tonne for international carbon-intensive HBI. From this data, the report concludes: “A green iron production tax credit worth $170, including the value of the existing hydrogen production tax incentive (HPTI), would have a very similar effect to a carbon price.” Such a measure would “narrow or eliminate cost gaps and expand the number of locations where green iron producers can compete in the international market” (see Figure 5). Unlocking Asia-Pacific as a First Mover: Australia’s Green Iron Opportunity 31

Unlocking Asia-Pacific as a First Mover 2025