This is shown from the first report on the Port Kembla Steelworks Renewables and Emissions Reduction Study, a project funded with $925,000 from the Australian Renewable Energy Agency's Future Fuels co-operative research centre.

The first "lessons learnt" report, covering March to June this year, said while biochar from renewable sources has the potential to replace some of the coal in steelmaking and reduce greenhouse gas emissions, there is a significant barrier.

Explainer: What is biochar and why is it good for steelmaking?

That is, the lack of a supply chain for the material in this country, for quantities larger than 50 tonnes.

BlueScope understands that if overseas sources were to be employed, significant work would need to go in to ensuring the char complied with "environmental and social standards".

"At the end of the first quarter of the project, one significant lesson has been identified: there is no supply chain for the bulk supply of biochar in Australia," BlueScope's report states.

At the start of the project BlueScope predicted it would need 1000 tonnes of low ash biochar for the trials, but had to settle for 600 tonnes, the minimum needed to proceed.

"If the trials are successful, further trials would require significantly more biochar," the Lessons Learnt report states in its conclusion.

"This would require additional consideration of the investigations to date that have identified that there is no established supply chain for the bulk supply of biochar in Australia."

Comment was sought from BlueScope for this story.