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Plans to produce green steel in the Pilbara and a push to process lithium onshore could lead to a reduction in greenhouse gas emissions in the iron ore and steel sectors.

Zero Emissions Steel Technology (ZESTY), developed by Australian technology company Calix Limited, produces steel using green hydrogen rather than coal and hope that its technology will lead a downward trend in harmful emissions.

“If you look at iron and steel, it’s responsible for about seven per cent of global CO2 emissions – that’s nearly 1.5 billion tonnes a year, so a huge problem,” chief executive Phil Hodgson said.

“Nearly 44 per cent of (Australia’s) export income comes from the export of iron ore, so if the whole industry is looking to decarbonise, Australia should be playing a major part in that.”

Calix’s technology will replace coal with green hydrogen roasted through its ZESTY iron process at lower temperatures and released steam as a by-product instead of CO2.

There are hopes this will replace the traditional steelmaking practices, where coal is used to separate oxygen from iron at very high temperatures.

The traditional method releases 1.8 tonnes of carbon dioxide for every tonne of steel produced.

“You can start to decarbonise the whole of the global industry by making a green iron here, capturing more value here,” Hodgson said.

Calix has been producing 2000 tonnes of green steel per year at its trial site in Bacchus Marsh, Victoria, and hopes to increase that to 30,000 tonnes at its first commercial demonstration plant.

Hodgson expects the commercial demonstration facility would be built in the Pilbara, close to the country’s major iron ore producers and anticipated hydrogen projects.

He acknowledged the cost of production in its early stages would be “reasonably expensive”, but said there was high demand for green steel.

“We’re pretty confident that once we can start to produce this we’ll find markets for it, because there’s a huge demand for zero-emissions steel and that demand will only increase over time,” Hodgson said.

The commercial demonstration facility is expected to be operating in 2024.