Unlocking Asia-Pacific as a First Mover 2025

Green iron projects announced since 2022 in Australia’s main export markets TABLE 3 Sour ce: BCG, 2025. Non-exhaustive Company/Consortium HBIS Gr oup (Xuansteel) China – Hebei600 kt H2-rich shaft-DRI plant (60% H2)Financed and operating since 2023 China Baowu (Zhanjiang) China – Guangdong1 Mt H2-ready DRI shaft + downstr eam EAFOperating since 2023 Rio T into + Baowu China (site to be decided)Pilot electric melter using Pilbara-or e HBI lanretni ;4202 nuJ UoM funding; concept design BHP + HBIS China – HebeiBF abatement tech and optimization of ir on-or e usage for DRI and EAF pr oduction ;stset gniogno ;4202 ni UoM proof of concept POSCO HyREX pilot Korea – PohangH deb-desidiulF 2-DRI (HyREX) pilot ;4202 dellatsni ecanruf toliP full plant FID 2025; planned for completion by 2027 UoM ekatffo IBH OCSOP Korea (import)Long-term MoU to buy W A low-carbon HBIMoU 2023; conditional on AU FID JFE Steel – H2-DRI pilot Japan – Kurashiki/FukuyamaH llamS 2 shaft-DRI pilot using low-grade pellets4202 ceD slairt ;tnarg t’voG decnavdA – leetS EFJ EAF planikihsaruK – napaJ 2 Mt high-efficiency EAF detcepxe ;5202 ni tnarg t’voG production starts in 2028 atoyoT & leetS noppiN Tsusho (HBI imports)Japan (import) erucorp ot krowemarF HBI fr om Middle-East/Oceania green-ir on hubsCommer cial MoU 2024Country Project Status Another solution aired at the workshop is for Australia to work with regional partners to align regional carbon pricing – ideally through an Asian Carbon Border Adjustment Mechanism (CBAM), similar to Europe’s, which will impose a price on the embodied carbon in goods imported to the bloc from January 2026 onwards. The EU is the world’s largest importer of finished and semi-finished steel products, accounting for 35% of global steel imports. Once CBAM is established, the EU’s steel imports are expected to attract an additional €2.21-2.70 billion in carbon tax in 2026.126 The prospect of these CBAM- driven taxes is already creating incentives for Asia’s emission trading systems (ETS) to converge. At the end of 2024, China’s ETS – the world’s largest carbon market – expanded from covering power only to encompass steel, aluminium and cement.127 Japan is moving to a mandatory ETS in 2026, while Korea is under pressure to raise prices in its ETS. An Asian CBAM would not only level the playing field regionally, it would also reduce EU compliance costs and ensure that the benefits of any carbon levies remain within the region, rather than – for example – being paid to the EU (see Box 11). If Asia’s ETSs were to converge towards EU ETS levels, carbon costs would then become material enough to change the calculus on sourcing low-carbon iron ore and green HBI for use in primary steel production, providing a much-needed demand signal for Australian green iron.Aligning Asia’s carbon markets with Europe offers another route to green iron Unlocking Asia-Pacific as a First Mover: Australia’s Green Iron Opportunity 43