Australia could green its heavy industry and expand low-emissions exports, but scaling up remains the key challenge, according to an expert analysis by researchers from Monash University and UNSW Sydney.
Australia’s economy is heavily tied to mining and exports of iron ore, copper and critical minerals, which are processed overseas into products such as steel, fertiliser and fuels. While these industries generate significant economic value and employment, they also account for some of the most difficult emissions to reduce.
According to ARC ECR Industry Fellow in Civil and Environmental Engineering at Monash University Changlong Wang and Associate Professor Rahman Daiyan of UNSW Sydney’s School of Minerals and Energy Resources Engineering, technological advances are now making it possible to produce materials such as steel without coal and to generate hydrogen using renewable electricity and water instead of gas.
However, the researchers note that progress remains uneven. Green hydrogen projects have faced financing and scaling difficulties, while developments in green iron and cleaner fuels are advancing more slowly than expected despite growing policy interest and market attention.
They argue that the main barrier is not technology, but coordination and system design. Instead of developing individual industrial projects in isolation, they suggest Australia should establish large-scale industrial hubs where renewable energy, hydrogen production, water supply, transport and port infrastructure are shared across multiple industries.
The analysis points to existing examples of industrial clustering, including established Australian export and manufacturing centres such as Gladstone in Queensland, where coal, gas, aluminium and chemical industries already rely on shared infrastructure.
International examples in countries including China, Germany and the Netherlands are also cited as evidence that coordinated industrial zones can support faster decarbonisation and reduce costs through shared energy systems and integrated planning.
The researchers say modelling indicates that combining renewable energy, hydrogen and green iron production in coordinated hubs could reduce power costs by around 20 to 30 per cent compared with standalone developments, largely by avoiding duplicated infrastructure and improving energy use efficiency.
They also suggest future industrial hubs could be designed with environmental restoration integrated into planning, concentrating infrastructure while protecting sensitive ecosystems and embedding nature repair into development.
Despite these potential benefits, the analysis highlights institutional and regulatory barriers, including fragmented approvals processes and limited coordination between government and industry.
The authors argue that governments would need to take a stronger coordinating role in identifying hub locations, aligning infrastructure planning and providing policy certainty, while industry would need to collaborate more closely across value chains.
They conclude that while the transition to greener heavy industry is complex, Australia has the resources and technical capacity to position itself as a major exporter of low-emissions industrial products if coordination challenges can be addressed.
