A Whyalla wipeout is finally going to occur, a decade on

There will soon be a climate change wipeout in the South Australian town of Whyalla, just not the type Tony Abbott once predicted, after the local steel mill announced a plan to switch the furnaces from coal to clean electricity.

In 2012, then-opposition leader Tony Abbott said Whyalla would be wiped off the map by the Gillard government’s carbon tax.

But on Tuesday, Liberty Steel announced it is coal-based steelmaking which will be all but wiped out, as it signed a supply contract for an electric arc furnace that will slash emissions 90 per cent by 2025.

The company is owned by British billionaire Sanjeev Gupta, and industry sources expect the transition to cost up to $500 million.

The mill is one of the high emissions sites captured by the Albanese government’s safeguard mechanism, which became law last week, imposes caps on the nation’s 215 largest polluters, who must cut their emissions by a cumulative 28.5 per cent by 2030.

Liberty can earn money through the safeguard mechanism scheme by shrinking its emissions below the pollution cap, enabling the mill to earn credits that can be sold to other companies that need offsets to comply with their targets.

The Whyalla steel mill is going green. Credit:Ben Searcy

Abbott’s warnings in 2012 followed comments from the Australian Workers Union that the emissions scheme would wipe the town from the map.

“Whyalla risks becoming a ghost town, an economic wasteland, if this carbon tax goes ahead,” Abbott said at the time.

The town became a flashpoint of the climate wars that ultimately helped bring down the Labor government.

After Julia Gillard introduced a carbon tax, breaking her election commitment not to do so, her trade minister Craig Emerson went viral with a video singing in off-tune manner, “No Whyalla wipeout, there on my TV” to the tune of Skyhooks’ 1970s hit Horror Movie.

The carbon tax proved short-lived after it was repealed in 2014 following Abbott’s election.

Abbott first introduced the safeguard mechanism to stop industrial emissions increasing, but until now it did not have enforced limits.

Under the Albanese government reforms, it has become a carbon trading scheme to help the nation reach its legally binding climate target to cut greenhouse gas emissions 43 per cent by 2030.

Climate Change and Energy Minister Chris Bowen said Liberty’s investment showed that the safeguard mechanism would reduce emissions and grow jobs in clean industries.

“This announcement is exactly the kind of investment that industry will make following our safeguard reforms that safeguard our industry, our climate and our economy,” Bowen said.

Gupta also weighed in.

“Today marks the beginning of a new era placing Whyalla at the heart of a global revolution in the steel industry, moving it from being the most polluting of all industries to among the cleanest and greenest,” Gupta said.

The company is also installing a direct reduction plant to process magnetite ore to produce low carbon iron. Liberty will initially use a mix of natural gas and green hydrogen as the reducing agent, before transitioning to green hydrogen only as it becomes available at scale.

The low carbon iron can be fed into the electric arc furnace with scrap metal to produce high-quality steel.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Most Viewed in Business

From our partners

Source: Read Full Article