BlueScope would have to use 15 times more electricity to make green steel under one option being considered.
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The Port Kembla steelmaker has set emissions reduction targets for the Illawarra plant; it has to cut 12 per cent by the end of the decade.
It's part of a growing commitment to look for cleaner options to make steel.
To that end, the company is spending $150 million to look for new pathways, which included an aim to build a pilot plant at Port Kembla that could use hydrogen to make steel.
In a speech at Sydney's ImpactX climate conference, the company's Climate Change Chief Executive Gretta Stephens said low-emission steelmaking would use a "significant" amount of electricity.
"And when I say a 'significant' increase in renewable energy, to give an idea of scale, our Port Kembla steelworks would need 15 times our current electricity requirements, taking it to 1.4 Gigawatts," Ms Stephens said.
That was why it was "crucial" to have reliable and affordable renewable electricity.
The extra electricity would be required were the steelworks to make its own hydrogen rather than sourcing a supply elsewhere.
It would use the process of electrolysis, which separates the hydrogen and oxygen in water in what would be a very energy-intensive process.
Ms Stephens said the steelmaker had already locked in a seven-year power purchase agreement with Finley solar farm west of Albury in NSW to supply electricity.
The chief executive also noted that many forecasters were seeing hydrogen-based steelmaking as the way forward when reducing emissions.
Ms Stephens said there needed to be a group effort - the steelmaker wouldn't be able to do it alone.
"We need collaboration - to build out a local hydrogen supply chain which requires multiple companies across multiple sectors who are willing and ready to provide the necessary offtake quantities to underpin the investment required," she said.
"All of this points to the need to create a hydrogen hub in the Illawarra, and we are keen to be involved."
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