It may be something many would prefer to ignore or even dispute, but Queensland has benefitted mightily from a product that is blamed for slowly choking the planet –  chiefly, metallurgical coal, the stuff that is used to make steel.

Met coal, until recently avoided much of the angst its cousin, thermal coal (used in power stations), has received, however, it could be that it is in the first stages of decline, or the long goodbye to our economic heartbeat, or what others call Peak Coal.

Technology and the demand for green steel is catching up with met coal and the implications for Queensland are profound.

Coal is worth about $80 billion to the economy and last financial year provided Treasury with royalties of $10 billion, which was used to fund a host of things including the $1000 energy rebates and a downpayment on the CopperString project.

Its supply chain is also long and deeply embedded in the Queensland economy.

A University of Queensland analysis found that “if and when the transition is fully underway, the risks to communities and landscapes are likely to be significant, and perhaps even permanent in nature”.

While the mines themselves are not big employers, the jobs they do provide are high-paying and bring considerable wealth to regional Queensland.

But an ominous sign for coal was the recent deal between BHP and Rio Tinto to develop a new type of processing for its Pilbara iron ore, using gas, rather than coal.

The iron ore giants have clearly seen the writing on the wall.

Steel, which contributes about 7 per cent of global emissions, has to decarbonise and to do that it has to find a process that doesn’t include coal, or gas. The cost of decarbonising the industry has been estimated by Wood Mackenzie at $US1.4 trillion ($A2 trillion) globally.

Other technologies are moving just as fast and the move by BHP and Rio is also about the competition, which includes one coal-free process to make green steel that uses a higher grade of iron ore than the type available in the Pilbara.

Even the Federal Government’s Future Made in Australia Bill works in some way against coal. It includes a green hydrogen production tax incentive of $2/kg of green hydrogen and a further A$1.3 billion to fund green hydrogen project development over the next decade through the Hydrogen Headstart program.

Not to put too fine a point on it, but green hydrogen is the replacement for coal and gas in steel making and potentially an energy source that replaces thermal coal in energy. That’s if it could ever became commercially viable.

Both sides of the coal debate tend to overcook their claims on this issue, but the truth is that technology may have caught up with met coal in the same way that renewables have put a knife through thermal coal, and that is pretty frightening news for the economy because we are nowhere near replacing the income coal delivers each year.

Simon Nicholas, the lead analyst for the IEEFA, which sits on the anti-fossil fuel side of the debate, told a Brisbane audience last week that eight years ago he never considered metallurgical coal as a dying commodity, but that had changed considerably in recent years.

He said peak metallurgical coal was going to be 2026 and from then on, the commodity was in declining demand as the steel industry shifts away from blast furnaces that use coal towards other technology.

Royalties are also in a steep decline, but that is a function of market prices levelling off after being at record highs in recent years.

He dismisses the Wood Mackenzie cost estimate of $US1.4 trillion, but admits the lack of commercial hydrogen is a big hurdle for so-called green steel.

But the Federal Government’s most recent report is bullish about demand, particularly from India where there is massive growth in the steel sector with 122 million tonnes of steel production capacity in the pipeline.

Nicholas even speculates that Indian steelmakers could try to shore up supply by buying equity stakes in Queensland mines.

Nicholas joined with the Queensland Conservation Council to take the green steel message to Brisbane and central Queensland last week.

The only bright spot in the debate is that coal’s demise is likely to be slow, perhaps over two decades or more.

But even so, preparations to deal with that don’t seem to have much urgency.

The State Government has tried to diversify the economy away from coal and put transition plans in place, which include a considerable amount of hope.

Some schemes to change the course of the economy are underway, like the incentives for the battery supply chain and the $1 billion the State and Federal governments have punted on PsiQuantum, however that was unlikely to benefit coal workers and success is not guaranteed.

There was also the millions thrown at hydrogen as well as the potential that renewables will generate new industries. Both of these require a fair amount of hope, but there is upside.

Let’s say politicians are not wallowing in solid ideas about how to replace the $80 billion coal delivers.

Business has a few ideas, but once again nothing is solid.

Brisbane-based Hawsons Iron has a high-grade iron ore project near Broken Hill which would produce a commodity that does not need coal in the steel-making process.

Queensland investment company Quinbrook has a $3.5 billion scheme with Central Queensland Metals to use magnetite iron ore from central Queensland for a green steel plant in Gladstone. Once again, no coal needed.

That’s where another Brisbane company could come into play.

Brisbane’s Gold Hydrogen is on the cusp of a significant discovery in South Australia of naturally occurring hydrogen, which could potentially be commercial.

Hydrogen could be used as a carbon free alternative to gas in processes including the one being investigated by BHP and Rio.

On the back of that, the State Government has announced $4 million in grants for companies to explore the state for natural hydrogen.

There is a chance Queensland could be a player in the fledgling green steel industry, which has a bit more impetus in Europe.