Simon Wandke, a non-executive director at Magnetite Mines and experienced leader in the resources industry today expressed his opinion on Australia’s green steel opportunity in The Australian.

“The energy challenge facing the world has not changed, despite the decades devoted to solving it. This challenge is not just about emissions and climate change. It is much more than that. It is about the tricky balance between the security of supply to sustain economies with the environmental impact of the energy we consume.

Ross Garnaut’s and Rod Sims’ proposal to help Australia become an economic superpower is also more than just about emissions. Instead, it contains a greater ambition.

It embraces ideas that reflect the change engulfing our planet as we navigate a gargantuan energy transition. Ideas that will make winners of nations if embraced, and losers if ignored.

Most commentators on the ‘‘superpower plan’’ will immediately focus on the $100bn carbon tax because it’s an attention-grabbing figure.

It is controversial, it creates division, and its chances of short-term resurrection are akin to Lazarus with a triple bypass.

This approach risks selling our country short.

Instead, Australia’s focus in this debate should be on the idea that our nation’s economy can transition to supply goods that take advantage of our mineral wealth and simultaneously embody our renewable energy strengths. The vision is an Australia creating a new suite of green commodities that will underpin an era of high investment, productivity, and full employment. This idea is not lost on a world that is already moving at pace – a movement that should stimulate vigorous debate here at home to advance efforts that secure the creation of new industries and new economic wealth. The alternative is to sit idly by as some of our largest export industries wither on the vine, while the opportunity that exists today is quickly siphoned off by first movers.

Steelmaking is central to that movement. Steel underpins human civilisation, ubiquitous in everything from bridges to buildings, transport to capital equipment. And usage is growing. But its impact is magnified as 70 per cent of global steel production relies on coal, generating 8 per cent of the world’s carbon emissions.

It should come as no surprise then that the transition to green steel production is already well under way, with increasing competitive tension among the world’s biggest steelmaking countries.

Can green steel be cost competitive with current cheap, dirty steel? The green steel train has left the station and is rapidly gathering steam, with Europe leading the way. The carrot and stick of customer demand for an emission-free supply chain and carbon tax mechanism rollouts will balance the market as it evolves. Increasingly frequent extreme weather events will serve as a continuous reminder of why the train must accelerate.

This is not about micro-movements to extend the lives of century old steel plants while making hairline reductions in emissions. While this preserves jobs in the short term it does not create comparative advantage for nations.

This is about a leap away from the status quo which sees steelmaking countries importing lower-grade iron ore and coal, along with their embodied carbon footprint.

It is a leap towards the value-adding production of sought-after “green iron”, produced with green hydrogen instead of coal and exported to international customers for green steel production. Or to simplify, the export of Australian-made goods embodying our renewable energy advantage that is simply not available to others.

This is not as easy as it sounds. To be successful, green iron production requires premium-grade iron ore products which are currently rare and represent only 6 per cent of today’s seaborne iron ore trade. It also requires low-cost renewable energy to produce hydrogen at scale, located close to the green iron production operations.

And this is where Australia’s comparative advantage comes to the fore. Our resources industry is world-leading and continuously evolving. And our land is endowed with vast magnetite deposits that can be concentrated into premium-grade iron ore. In fact, magnetite ores today represent 38 per cent of Australia’s iron ore endowment, with South Australia and Western Australia blessed with abundant, untapped magnetite deposits, some of them literally poking out of the ground.

Australia is also progressing the rollout of low-cost renewable electricity on grid at a staggering pace, creating the potential to produce green hydrogen in increasingly large volumes. South Australia is leading this charge with wind and solar already accounting for 75 per cent of the state’s energy make-up, and rapidly increasing to meet its target of 100 per cent by 2030. That is world-leading deployment.

It is these advantages that Professor Garnaut was extolling: “so large that they define the most credible path to restoration of growth in Australian living standards”.

The risk of turning our back on this debate, and on this opportunity, is the risk of condemning Australia to becoming a laggard in a rapidly transitioning world and rendering our emissions reduction efforts ineffective. A double jeopardy, so to speak. The risk is denying our role in the energy transition of products, industries, sectors, and nations. A risk too large to be ignored.”

Simon Wandke is a former CEO of ArcelorMittal Mining and has held senior executive roles at Ferrexpo, Destra and BHP Billiton. He is a currently a non-executive director of Magnetite Mines