EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry and Innovation
Industry Research and Development Act 1986
Industry Research and Development (Green Iron Investment Fund—Whyalla Steelworks Transformation Stream Program) Instrument 2025
Purpose and Operation
Section 33 of the Industry Research and Development Act 1986 (the IR&D Act) provides a mechanism for the Minister to prescribe programs, by disallowable legislative instrument, in relation to industry, innovation, science or research, including in relation to the expenditure of Commonwealth money under such programs.
The statutory framework provided by section 33 of the IR&D Act enables a level of flexibility to provide authority for Commonwealth spending activities in relation to industry, innovation, science and research programs. This allows the Government to respond quickly and appropriately to the need to implement innovative ideas and pilot programs on an ongoing basis and as opportunities arise. Prescribing programs in legislative instruments provides transparency and parliamentary oversight of Government programs and spending activities, whilst reducing administrative burden on the Commonwealth.
Once a program is prescribed by the Minister under section 33, subsection 34(1) allows the Commonwealth to make, vary or administer arrangements in relation to activities under the prescribed program. Arrangements may include contracts, funding agreements or other arrangements, and may provide for money to be payable by the Commonwealth to one or more third parties. The power conferred on the Commonwealth by subsection 34(1) may be exercised on behalf of the Commonwealth by a Minister or an accountable authority of a non-corporate Commonwealth entity, or by their delegate (under section 36).
The purpose of the Industry Research and Development (Green Iron Investment Fund—Whyalla Steelworks Transformation Stream Program) Instrument 2025 (the Legislative Instrument) is to prescribe the Green Iron Investment Fund—Whyalla Steelworks Transformation Stream Program (the Program). The funding for the Program has been announced through the Department of Industry, Science and Resources (the Department) 2025-2026 Budget. The Program forms part of the $1 billion Green Iron Investment Fund and is part of the Australian Government’s commitment to support green metals as a priority sector under a Future Made in Australia. The Program forms part of a broader support package totalling up to $1.9 billion by the Commonwealth and South Australian governments to secure the long-term future of the Whyalla Steelworks.
Up to $500 million of the Green Iron Investment Fund will be allocated to the Program for the new owner of OneSteel Manufacturing Pty Limited and/or the relevant assets (the Whyalla Steelworks) for a suitable project supporting the move to green iron production. The profile of funding is not for publication due to commercial sensitivities.
The broader objectives for the Green Iron Investment Fund are to:
- De-risk early mover capital investments in Australian commercial scale green iron production capability;
- Crowd-in private investment for a strong green iron industry;
- Create economic benefits, jobs and spillovers associated with a strong green iron industry; and
- Achieve community benefits, in line with Future Made in Australia Community Benefits Principles.
In addition to the objectives above, this Program has an objective of:
- Transformation of the Whyalla Steelworks to a long-term, commercially viable ‘pit to port’ iron and steel operation, underpinned by low-emissions technology and delivering lasting economic benefits to the Whyalla community.
Funding is available to the new owner of OneSteel Manufacturing Pty Limited and/or relevant assets (the Whyalla Steelworks), to undertake eligible projects to support activities related to establishing a green iron facility.
Funding authorised by this Legislative Instrument comes from Program 1.1, Outcome 1, as set out in the Portfolio Budget Statements 2025-26, Budget Related Paper No. 1.11, Industry, Science, and Resources Portfolio (https://www.industry.gov.au/sites/default/files/2025-03/2025-26-department-of-industry-science-resources-pbs.pdf) at page 23.
The Program will be delivered by the Business Grants Hub which is a specialised design, management and delivery body within the Department with extensive expertise and capability in delivering similar scale programs.
The Program is a closed, non-competitive grant program. The Program is administered by the Department in accordance with the Commonwealth Grant Rules and Principles 2024 (https://www.legislation.gov.au/F2024L00854/latest/text). Eligibility and assessment criteria will be outlined in the Program Guidelines. Exemption will be sought to not publish Guidelines due to commercially sensitive content in relation to the sale process.
The grant will be up to a maximum of $500 million. The project cannot be entirely funded from Commonwealth Government backed funding sources. The total amount of funding awarded from the Program is not for publication due to commercial sensitivities.
As this is a closed, non-competitive grant that supports the implementation of policy decisions made by the Government, the Program will not be subject to merits review. Merits review of the Program would not be appropriate because decisions will relate to the provision of ad-hoc grants to a certain service provider. The Administrative Review Council has recognised that decisions of this nature should be excluded from merits review (see paragraphs 4.16 to 4.19 of What decisions should be subject to merits review? available at https://www.ag.gov.au/legal-system/publications/arc-what-decisions-should-be-subject-merit-review-1999).
Applications will be assessed against the eligibility criteria and assessment criteria set out in the Program Guidelines. Only eligible applications will proceed to the assessment stage. Applications will be assessed by an assessment panel which may comprise of representatives from the Australian Government and individuals with relevant expertise. The panel may also seek additional advice from technical experts or advisors to inform the assessment process.
In addition to applications being assessed on how well they meet the criteria, applications will also be assessed on whether they provide value with relevant money as set out in the Program Guidelines.
The assessment panel will assess the application individually against each criterion and determine whether the application response and associated evidence is suitable.
Both successful and unsuccessful applicants will be informed in writing. Unsuccessful applicants have an opportunity to discuss the outcome with the Department.
Persons who are otherwise affected by decisions or who have complaints about the Program will also have recourse to the Department. The Department investigates any complaints about the Program in accordance with its complaints policy and procedures. If a person is not satisfied with the way the Department handles the complaint, they may lodge a complaint with the Commonwealth Ombudsman.
Statement of the Relevance and Operation of Constitutional Heads of Power
For the purposes of subsection 33(3) of the IR&D Act, the legislative power in respect of which the Legislative Instrument is made is the external affairs power in paragraph 51(xxix) of the Constitution.
External affairs power
Paragraph 51(xxix) of the Constitution empowers the Commonwealth Parliament to make laws with respect to ‘external affairs’. The external affairs power supports legislation implementing Australia’s international obligations under treaties to which it is a party. Australia has obligations relevant to this Legislative Instrument under the following treaties:
- the Kyoto Protocol to the United Nations Framework Convention on Climate Change done at Kyoto on 11 December 1997 ([2008] ATS 2) (Kyoto Protocol), particularly Article 10;
- the Paris Agreement done at Paris on 12 December 2015 ([2016] ATS 24) (Paris Agreement), particularly Article 4; and
- the United Nations Framework Convention on Climate Change done at New York on 9 May 1992 ([1994] ATS 2) (UNFCCC), particularly Article 4.
Article 10(b) of the Kyoto Protocol requires Parties to implement national and regional programmes containing measures to mitigate climate change, including measures relating to the abatement of increases in greenhouse gas emissions, which may concern the energy, transport and industry sectors. Article 4(2) of the Paris Agreement obliges Parties to take domestic mitigation measures ‘with the aim of achieving the objectives’ of a nationally determined contribution. Australia’s Nationally Determined Contribution is to reduce greenhouse gas emissions to 43% below 2005 levels by 2030, and to produce net zero emissions by 2050. Under Article 4(19) of the Paris Agreement, Australia is also obliged to ‘strive to formulate and communicate long-term low greenhouse gas emission development strategies’.
Article 4(1)(b) of the UNFCCC requires Parties to formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to mitigate climate change by addressing anthropogenic emissions. Article 4(2)(a) requires developed country Parties to commit themselves to adopt national policies and take measures on the mitigation of climate change.
Funding provided under the Legislative Instrument will provide support for prospective green iron production at Australian steelworks and secure investment for a green iron industry in Australia. The funding will contribute to a reduction in Australia’s greenhouse emissions and to Australia achieving its 2030 and 2050 targets, in line with global and domestic decarbonisation ambitions.
Further details of the Legislative Instrument are set out at Attachment A.
Authority
Section 33 of the IR&D Act provides authority for the Legislative Instrument.
Consultation
The Department conducted public consultation during the Unlocking green metals opportunities for a Future Made in Australia consultation process which ran between 31 May and 14 July 2024. The Department received 90 responses from a range of stakeholders including industry, peak industry bodies, academia, government and more.
Additionally, the Department conducts ongoing consultation with the Industrial Decarbonisation and Green Metals Advisory Panel (the Advisory Panel) on the green metals agenda, including green iron.
As part of the sales process for OneSteel Manufacturing, the Department, through the Joint Taskforce in conjunction with the South Australian Government, has engaged with the Administrators and sale agent. The Department has also consulted other Commonwealth agencies and external probity, legal, and commercial advisors on the Program.
Insights from these consultation processes helped to inform program settings.
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department has been consulted on this Legislative Instrument.
Statement of Compatibility with Human Rights
A Statement of Compatibility with Human Rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out at Attachment B.
Attachment A
Details of the Industry Research and Development (Green Iron Investment Fund — Whyalla Steelworks Transformation Stream Program) Instrument 2025
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Green Iron Investment Fund — Whyalla Steelworks Transformation Stream Program) Instrument 2025.
Section 2 – Commencement
This section provides that the Legislative Instrument commences on the day after registration on the Federal Register of Legislation.
Section 3 – Authority
This section specifies the provision of the Industry Research and Development Act 1986 (IR&D Act) under which the Legislative Instrument is made.
Section 4 – Definitions
This section provides for definitions of terms used in the Legislative Instrument.
For the purpose of this Program, green iron is defined as ‘a concentrated iron metal made from the reduction of Australian iron ore by using a lower emissions reducing agent’. Examples include renewable hydrogen, renewable energy or natural gas, where there is a pathway to renewable alternatives.
Section 5 – Prescribed Program
This section prescribes the Program for the purposes of section 33 of the IR&D Act.
The Program provides funding that supports commercial scale green iron production capabilities in Australia. This will be done by providing grant funding to the new owner of OneSteel Manufacturing Pty Limited and/or the relevant assets (the Whyalla Steelworks) for a suitable project supporting the move to green iron production.
The Program will contribute to emissions reduction in the steel value chain, in line with global and domestic decarbonisation ambitions.
The steel value chain refers to the network of processes involved in the production, distribution and consumption of steel. Ironmaking is a core component of steel production and the steel value chain.
Section 6 – Specified Legislative Power
This section specifies that the legislative power in respect of which the Legislative Instrument is made is the power of the Parliament to make laws with respect to external affairs (paragraph 51(xxix) of the Constitution).
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Green Iron Investment Fund— Whyalla Steelworks Transformation Stream Program) Instrument 2025
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Industry Research and Development (Green Iron Investment Fund— Whyalla Steelworks Transformation Stream Program) Instrument 2025 (the Legislative Instrument) provides legislative authority to commit Commonwealth funding for the Green Iron Investment Fund— Whyalla Steelworks Transformation Stream Program (the Program). The Program forms part of the $1 billion Green Iron Investment Fund and is part of the Australian Government’s commitment to support green metals as a priority sector under a Future Made in Australia. It is also part of the joint commitment from the Australian and South Australian Governments of up to $1.9 billion in funding to support the long-term transformation of the Whyalla Steelworks. Up to $500 million of the Green Iron Investment Fund will be allocated to the Program, with the profile of funding not for publication due to commercial sensitivities.
The Program will provide funding to the new owner of OneSteel Manufacturing Pty Limited and/or relevant assets (the Whyalla Steelworks) for a suitable project supporting the move to green iron production.
The program will contribute to emissions reduction in the steel value chain, in line with global and domestic decarbonisation ambitions.
Human rights implications
The Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
The Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Hon Tim Ayres
Minister for Industry and Innovation