The Australian Renewable Energy Agency will invest nearly $1m to accelerate BlueScope's transition to low-carbon steel.
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The funding will go towards a study investigating how to reduce carbon emissions from steelmaking and the manufacture of low-emissions steel at the Port Kembla steelworks, said Bluescope Chief Executive Australia, John Nowlan.
"This study will provide another valuable input as we progress our decarbonisation pathway," he said. "We look forward to working with ARENA and our study partners to explore decarbonisation options at Port Kembla."
The funding is the latest in government support for BlueScope's ambitions to become carbon neutral by 2050.
The steelmaker recently received a $55.4 million grant as part of the federal Modern Manufacturing Initiative for a facility to fabricate components for renewable energy, defence and other sectors as well as upgrades and improvements to BlueScope's plate mill.
Announcing the grant, Minister for Industry, Energy and Emissions Reduction Angus Taylor said the funding would support operations within and outside of the steelworks.
"These investments will not only provide reliable and cleaner energy, but also support the creation of jobs and contribute to the ongoing success of the manufacturing industry in regional NSW," he said.
Mr Taylor also announced a $85 million investment from the Clean Energy Finance Corporation in wheat processor and ethanol manufacturer Manildra replacing coal with a gas-fired co-generation plant at its facility in Bomaderry.
Manildra Group managing director John Honan said the project would generate 170 construction jobs and enable 100 per cent of the electricity required at Shoalhaven starches to be produced onsite.
Mr Taylor said that the facility would be able to use green-hydrogen instead of gas in the future when the price of clean hydrogen is reduced.
"This scale of investment in energy transition, generation and infrastructure cements our staunch commitment to a sustainable, cleaner fuel powered site, which eliminates coal from our supply chain and fundamentally, secures the sites energy future for decades to come," he said.
Ahead of the commercial viability of green steel technologies, using hydrogen in place of coal, BlueScope has begun investigating reducing carbon emissions from steelmaking. The current reline of blast furnace No. 6 will incorporate technologies that cut greenhouse gases emitted during the production of iron and steel.
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