Greg Combet, announcing the industry would be exempt from the carbon price, so business as usual?

Was it coal miner South32, stoking fears the Port Kembla steelworks would close if its Dendrobium mine was not allowed to expand?

Or Tony Abbott, threatening Whyalla would be wiped out, and Port Kembla too, under a carbon price?

None of the above. It was spoken last month at the opening of a new environmental initiative: the world's first "green steel" plant.

Read more: Green steel flagged as an end to 'climate wars'

"Hybrit" was launched in Sweden last week by that country's Prime Minister Stefan Lofven, with the refrain "steel is jobs".

Not yesterday's jobs, like many in the Illawarra may believe after Wollongong has already endured massive cuts to the once-dominant Port Kembla workforce, but tomorrow's steel jobs.

Experts with an eye on both steel markets and climate change are talking up the potential of hydrogen to replace emissions-intensive industries - steel may be one of the easier to transform.

Steel, the Grattan Institute's energy policy director Tony Wood told the Mercury, should be the first industry transformed by hydrogen.

"Our view is that in some time, as with other industries, there will be a fundamental move away from the current way of manufacturing steel, driven by climate change," he said.

"You can see the beginning of that, although it's still relatively early. It's an inevitable long-term transition; it's not an overnight transition - it's something that can be planned for.

"To turn it into something that is real will not be a walk in the park.

"No-one wants to build a green steel plant to produce expensive steel that no-one wants to buy."

The benefits of hydrogen are several. It can be produced from water via a process called electrolysis. All furnaces need a major source of heat, and hydrogen burns clean, producing no emissions. It could replace coking coal as the reduction agent to turn iron oxide (ore) into iron metal. And, Mr Wood said, much of the operation could be powered by Australia's abundance of renewable wind and solar power sources.

The downside for the Illawarra's traditional economy would be a massive reduction in the demand for coking coal, an industry with a workforce of about 2700.

Michael Lord, lead researcher at think tank Beyond Zero Emissions, said "green steel" would cost more, but said the market was there; major customers, including Volkswagen and Toyota, were already pledging to be carbon-neutral - including their steel.

The Mercury sent BlueScope a series of questions about hydrogen steelmaking, but it would not comment ahead of the release of its sustainability report, which a spokesman said would contain information about carbon reduction plans.

BlueScope may well press on with its blast furnace. It's unlikely to announce a major redirection in a sustainability report. But if a low-carbon economy becomes dominant, will Australia's own steelmaker be left behind?

Mr Wood said it was a matter of timing.

"The risk is that in 20 years time we say 'what happened there? How come we didn't grab that opportunity?' If our Australian steelmakers don't go down this route, and their customers want low-emissions steel, then they'll be cut out as well.

"If there was no Australian manufacturer, customers would just import it, and Australian steelmakers would go out of business.

"The advantage of thinking about this now is that ... if the world starts to move faster away from coal, then we can move faster as well."

BlueScope's domestic rival, Whyalla-based Liberty, has announced a $1 billion plan to replace its blast furnace with an electric arc furnace. Owner Sanjeev Gupta called it "modern steelmaking".

While that price tag is steep, BlueScope is contemplating when, or whether, to reline its blast furnace - a process which cost $370 million in 2009.

Hydrogen is firmly in the sights of NSW Environment Minister Matt Kean, who has announced plans for a "hydrogen hub" and encouraged Port Kembla to bid for it.

"The economics are sufficiently clear [to] say steel from renewable hydrogen ... almost certainly will become economic. Probably even more so than some of the more difficult to de-carbonise sectors such as cement, aluminium, airline fuels and so on," Mr Wood said.

"We can actually add real value to [exports] in a way that is economically sensible, and add a lot of jobs that are reasonably well paid."

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