WA accounts for 38% of the world's iron ore supply but does not produce any steel.
The report, commissioned by the government, aimed not to answer the question of whether a green steel industry was possible, but rather how to make it possible.
The report had 17 findings, outlining the opportunities and the challenges.
It looked at two development scenarios; the production of green iron in the form of hot briquetted iron (HBI); and the production of green steel.
Capital requirements for a 4.8Mtpa HBI plant were forecast at nearly A$7 billion, comprising a mining facility, pelletisation facility and shaft furnace.
However, capex for renewable energy (wind and solar) to power the facility was put at $20.8 billion, plus $3.6 billion for a hydrogen facility.
The report found the scenario would add $85 billion to Australia's gross domestic product during construction and through its 24-year life, as well as taxation benefits of $31.7 billion and $66.5 billion in real income.
To produce 2.8Mtpa of green steel, capex was forecast at more than $5.1 billion with energy infrastructure to cost $15.9 billion as well as $2.4 billion for a hydrogen facility.
The report found producing green steel would add $56.2 billion to Australia's GDP, generate $45.6 million in real income and $19.4 billion in taxes.
However, the report found that for green steel to be economic in WA, the price of hydrogen must reach the so-called "stretch" target of approximately US$2/kg or A$3/kg (from $7/kg currently).
"Our state's abundant renewable energy resources alongside our world-leading iron ore industry puts WA front and centre in the global push towards green steel," WA premier Roger Cook said.
"Moving up the green steel value chain will diversify our economy and create more local jobs right across the state."
Mines and petroleum minister Bill Johnston noted each scenario generated more than 1000 full-time jobs.
"The Cook government now has a comprehensive understanding of the challenges facing the steel industry in its decarbonisation efforts and opportunities for future value adding of iron ore in Western Australia," he said.
"The transition option of using natural gas has the potential to reduce emissions from iron making by 65% and is technically feasible today. This information can be used to support investment attraction into Western Australia.
"There is increasing interest in Western Australia by the steel industry given the access to our iron ore resources and renewable energy options. Coordinated efforts will be required to secure that investment."
