ARENA backs joint venture to trial electric furnace for lower-carbon steelmaking
A new pilot project in Kwinana backed by ARENA and major industry players is set to test electric smelting technology using Pilbara ore, offering a possible path toward cleaner steel and new export opportunities.
Australia’s industrial decarbonisation efforts have been boosted by $19.8 million in funding allocated by the Australian Renewable Energy Agency (ARENA) to support the NeoSmelt project that brings together BlueScope, BHP, Rio Tinto, Woodside Energy and Mitsui Iron Ore Development.
The project will focus on a front-end engineering and design (FEED) study for a proposed electric smelting furnace pilot plant in the Kwinana Industrial Area, south of Perth. If successful, this approach could make it possible to produce molten iron with lower carbon emissions from Pilbara iron ore.
The project is part of ARENA’s Powering the Regions Industrial Transformation Stream, which supports industrial decarbonisation at existing regional facilities. Round 2 of this stream is currently open and accepting applications until 15 July 2025. It funds projects involving electrification, low emissions processing, energy efficiency and fuel switching, along with enabling technologies such as storage and demand management.
The NeoSmelt study will assess whether the DRI-ESF process can be scaled up to produce lower-emissions iron domestically. This would give Australian industry an opportunity to shift part of the steelmaking process onshore, while reducing reliance on traditional blast furnace methods that produce high levels of emissions.
“Globally, the steelmaking industry makes up around eight per cent of global greenhouse gas emissions, so the decarbonisation opportunity is huge,” said ARENA CEO Darren Miller.
“As the world’s largest producer of iron ore, Australia has an important role to play in reducing emissions across the steel value chain. We’re excited by the insights this project expects to provide. This is a positive step towards building a lower-emissions steel industry here in Australia.”
NeoSmelt’s project partners welcomed the funding support and reaffirmed their commitment to exploring new technologies.
Speaking on behalf of the joint venture, BlueScope Chief Executive Australia Tania Archibald said, “With this backing from government and industry leaders, we now have the opportunity to develop world leading technology that will have potential application across the global steel industry and provides the foundation for a future Australian lower-carbon emissions iron export industry.”
The Industrial Transformation Stream continues to seek projects with the potential to demonstrate new methods, support workforce upskilling and share knowledge across the sector. Applications are encouraged from regional industrial facilities looking to cut greenhouse gas emissions while improving their process efficiency.
