Wollongong Greens Councillor Mithra Cox welcomed the strategy but said it must be based on green hydrogen - produced using renewable energy.
"The green hydrogen industry is particularly important to Wollongong, as it means that we could decarbonise steel production - and it also means a wealth of new jobs and industries," Cr Cox said.
"Wollongong has always been [based] on coal mining, steel making and manufacturing. We want to remain an industrial city - but using the technologies of the 21st Century and ensuring that our future is sustainable."
Business Illawarra executive director Adam Zarth said Illawarra industry was already transforming its energy generation.