A $182-million upgrade to BlueScope's Port Kembla coal terminal has been approved by the NSW government, allowing the steelmaker to import coal from Queensland.
Planning Minister Paul Scully says the project has been declared Critical State Significant Infrastructure, which allows improvements of three berths at the terminal to be kick-started.
"As metallurgical coal supplies change and decrease out of the coalfields near the Illawarra, we have to start importing coking coal to keep steelmaking going," he said.
Up to 100 people will be employed in the two-year construction.
The existing berths, built in the 1950s, currently bring in a relatively small amount of coal from outside NSW.
Future-proofing Illawarra steel
As the region's Dendrobium Mine winds down, BlueScope needs to make other plans, says David Scott, the steelmaker's general manager of Manufacturing for Australian Steel.
"So, we look to provide that capacity of importing coal here across our berths," he said.
"That coal will more than likely come out of the Queensland coal basins."
The new berths could also be used to bring in lower-emission steelmaking technology, including biochar.
Biochar technology uses biomass, such as timber waste, as a substitute for pulverised coal, which reduces carbon emissions.
BlueScope just completed a successful 1,000-tonne biochar trial in its No. 5 Blast Furnace, Mr Scott said, but the biochar supply chain was a challenge.
"The supply chain does not exist," he said.
"We need to continue to explore opportunities to develop a supply chain of biochar in the future, such that we have a viable supply chain that we can bring biochar, potentially, in over our berths."
Sustainable steelmaking
On Tuesday, BlueScope announced it would spend $300 million to build an electric arc furnace (EAF) to help decarbonise its Glenbrook operations in New Zealand.
In a statement, chief executive Mark Vasella said it made sense to have "a reliable and affordable supply of both firmed renewable energy and domestic scrap steel".
Scrap steel supply issues mean the steelmaker cannot go down a similar path in Australia, but Mr Scott says direct reduced iron (DRI) could be a low-emissions option.
"In terms of what we make here — we're talking volumes of steel around 3.2 billion tonnes — we don't have the volume of scrap to support that volume of domestic steel," he said.
"So, what we think the pathway for a low-emissions steelmaking technology in Australia is through DRI."
DRI technology often uses gas to produce hydrogen and carbon monoxide, which are then used to turn iron ore into iron.
Last year, BlueScope reported that "using renewably sourced hydrogen to make DRI is considered the most likely technology to provide the breakthrough to very low-emissions iron and steelmaking".
But the steelmaker does not believe the technology will be commercially viable until 2040.
In 2021, the steelmaker signed a deal with Rio Tinto to explore low-emissions technology, including hydrogen DRI.
Feeding into steel mandate
In 2015, while in opposition, Labor brought forward legislation to mandate steel that was at least 90 per cent Australian-made in all publicly funded infrastructure across NSW.
It was ultimately not accepted by the former coalition government.
Mr Scully said the new Chris Minns Labor government has been going through the process of amending procurement laws and rules.
"We believe that we can get there in this term of government," he said.
BlueScope said local content mandates would be important for the transition to renewables.
