China and Australia are increasingly focusing on green steel production, utilizing hydrogen as a cleaner alternative to traditional coal-based methods, which are highly carbon-intensive.
China is the world’s largest steel producer, generating over 1 billion metric tons annually. Australia is the largest supplier of iron ore to China, providing over 65% of the Asian giant’s imports, followed by Brazil.
To advance China’s peak carbon and carbon neutrality goals, China has introduced a series of policies aimed at strengthening its dual carbon control system. The government has also launched the Special Action Plan for Energy Conservation and Carbon Reduction in the Steel Industry, setting clear targets for 2025, such as improving energy efficiency, increasing scrap steel usage, and raising the share of Electric Arc Furnace (EAF) steel production.
During China’s Two Sessions in 2025, the National Development and Reform Commission (NDRC) outlined “ongoing regulation of crude steel production as well as promoting capacity reduction and restructuring” as a key priority in the 2025 National and Social Development Plan. Furthermore, China has explicitly supported hydrogen metallurgy and unveiled detailed implementation plans, promoted upstream and downstream demonstration projects within the “green electricity–green hydrogen–pure hydrogen metallurgy” value chain, facilitating an integrated approach to steel decarbonisation.
Fortescue Metals Group, a major Australian iron ore exporter, has secured a 14.2 billion Chinese yuan (approximately AUD $3 billion) Chinese loan facility, marking a significant funding milestone in its clean-energy transition strategy. The financing, arranged with leading Chinese lenders including Bank of China and Industrial and Commercial Bank of China, carries a fixed annual interest rate of 3.8 percent over five years.
“As the US is getting out of the clean energy business, Fortescue is getting out of the US”
The funding comes just weeks after the Fortescue announced the cancellation of its involvement in the high-profile US green hydrogen developments—the Arizona Hydrogen Project, citing the instability of clean energy projects in the US under the Trump administration.
The decision to secure a yuan-denominated facility with no restrictions on use positions Fortescue as the first Australian company to access such funding terms, underscoring the group’s growing strategic and financial ties with Chinese institutions.
Analysts interpret the move as an effort to deepen integration into Asia’s clean-energy value chain. Accessing funding from Chinese banks not only diversifies Fortescue’s capital base but also aligns the miner with potential supply-chain and technology partnerships in renewable energy, electrification, and low-carbon industrial processes.
The unrestricted nature of the loan gives Fortescue flexibility to deploy capital where it can achieve the fastest and most measurable decarbonisation outcomes—whether through electrification of mining fleets, renewable-powered operations, or selective smaller-scale hydrogen projects.
Sources:
Business News Today, August 9, 2025. https://business-news-today.com/fortescues-2bn-green…/
Inside China Business, Aug 24, 2025.
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