Calix Limited has secured a $44.9 million grant from ARENA to build a pioneering Green Iron Demonstration Plant using its ZESTY technology, aiming to produce 30,000 tonnes of low-emission iron annually and advance Australia’s green steel ambitions.
- ARENA awards $44.9 million grant for ZESTY Green Iron Demonstration Plant
- Plant targets 30,000 tonnes per annum of hydrogen direct reduced iron or hot briquetted iron
- Demonstration Plant to process diverse Australian iron ores, supporting low emissions steel value chain
- Final Investment Decision targeted for FY26, with operations planned to start in 2028
- Project funding requires matched contributions; Calix plans equity and project financing
A Major Step for Green Steel in Australia
Calix Limited, an Australian environmental technology company, has taken a significant leap forward in the race to decarbonise steel production. The company announced it has executed a $44.9 million grant agreement with the Australian Renewable Energy Agency (ARENA) to construct a Green Iron Demonstration Plant using its innovative Zero Emissions Steel Technology (ZESTY). This project aims to produce 30,000 tonnes per annum of hydrogen direct reduced iron (H2-DRI) or hot briquetted iron (HBI), marking a critical milestone in developing a low emissions steel industry in Australia.
Technology and Industry Impact
ZESTY combines electric heating with hydrogen reduction to produce green iron, offering a flexible and cost-effective pathway to decarbonise steelmaking. Unlike traditional methods, ZESTY’s approach minimizes hydrogen consumption, removes the need for ore pelletisation, and can process lower-grade and fine iron ores common in Australia’s Pilbara region. This flexibility is crucial for integrating renewable energy sources and supporting a diverse range of iron ore producers.
The Demonstration Plant is designed not only to produce green iron but also to serve as a toll processing facility, enabling multiple iron ore producers to test and validate the technology. This multi-user approach could accelerate the adoption of green steelmaking pathways domestically and internationally, potentially reshaping global supply chains.
Project Timeline and Funding
The project is currently moving into detailed design engineering, with a Final Investment Decision (FID) targeted for fiscal year 2026. Construction is planned to commence in 2026, followed by staged commissioning and operations beginning in 2028. The ARENA grant covers up to 50% of the project budget, contingent on matched funding and milestone achievements. Calix intends to secure the remaining funds through equity investments and project financing, leveraging its strong balance sheet to progress through to the end of FY26.
Strategic and Environmental Significance
The steel industry accounts for approximately 7-8% of global CO2 emissions, with traditional blast furnace methods being particularly carbon intensive. Calix’s ZESTY technology offers a pathway to significantly reduce these emissions by enabling near-zero carbon iron production. The project aligns with Australian government priorities to foster green metals industries, create jobs, and maintain the competitiveness of Australia’s iron ore exports in a decarbonising world.
Government officials, including Minister for Climate Change and Energy Chris Bowen and ARENA CEO Darren Miller, have highlighted the project’s potential to transform Australia’s steel sector and contribute to global emissions reduction efforts. Calix’s CEO Phil Hodgson emphasized the importance of this milestone in future-proofing Australia’s iron ore industry and addressing the global challenge of industrial decarbonisation.
Looking Ahead
Following the Demonstration Plant, Calix plans to complete a pre-front end and front-end engineering design study for a commercial-scale ZESTY plant. This will provide a detailed techno-economic assessment to support scaling the technology for broader commercial deployment. If successful, ZESTY could become a cornerstone technology for green steel production, both in Australia and globally.
Bottom Line?
Calix’s ZESTY project could redefine Australia’s iron ore future, but execution risks and funding remain key hurdles.
Questions in the middle?
- Where will the Demonstration Plant be located, and how will that impact logistics and partnerships?
- What are the specific financing strategies Calix will pursue to secure matched funding beyond the ARENA grant?
- How will ZESTY’s performance at demonstration scale influence adoption by major steelmakers domestically and internationally?