Australia–China Steel Partnership Sets Global Decarbonisation Standards With Direct Implications for India’s Trade Competitiveness
SDG 9: Industry, Innovation, and Infrastructure | SDG 13: Climate Action
Institutions: Ministry of Commerce & Industry
Australia and China have signed a Memorandum of Understanding (MoU) establishing a policy dialogue dedicated to advancing steel decarbonization. This collaboration was agreed upon by the leaders during Prime Minister Anthony Albanese’s visit to China in July 2025 and reflects a shared commitment to reduce emissions across the iron and steel value chains.
The Policy Dialogue, which will hold its inaugural meeting in Australia in 2026, will focus on:
Decarbonization Pathways: Sharing insights and exploring opportunities for reducing emissions across the entire iron and steel value chain.
Market and Trade: Discussing the development of decarbonized iron and steel markets and trade practices.
Policy Cooperation: Reviewing respective domestic policy settings and identifying opportunities for bilateral cooperation in climate action.
Policy Relevance
The Australia–China MoU carries significant implications for India as it shapes the next generation of global trade and technology standards in iron and steel. By signalling a shift toward “decarbonised” steel markets, it will influence future certification norms and carbon-linked trade requirements that Indian producers must meet to stay competitive and avoid barriers such as carbon border measures. The collaboration’s focus on hydrogen-based and other low-carbon steelmaking provides a technical and policy blueprint that India’s green-metals strategy must integrate, given that iron and steel account for nearly 9% of global emissions. At the same time, China’s potential move away from coal-based processes could reshape global demand, raw-material flows, and input pricing, directly affecting India’s cost structures. For India, the MoU also offers a strategic benchmark for shaping climate-trade diplomacy and aligning domestic innovation with the emerging global standards being forged by major players in the steel economy.
What is Steel Decarbonization?→ Steel decarbonization refers to the process of significantly reducing or eliminating greenhouse gas (GHG) emissions from the iron and steel production value chain. As iron and steelmaking account for up to 9% of global emissions, collaboration between major resource suppliers (Australia, a key iron ore exporter) and major manufacturers (China) is considered essential to meet the growing demand for low-emissions steel.
Relevant Question for Policy Stakeholders: How should India leverage this new Australia-China policy dialogue to ensure that its domestic green steel standards are interoperable with emerging decarbonized iron and steel markets in Asia?
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