The steelmaker has scrapped plans to establish a wind tower manufacturing facility as part of its $200 million-plus Advanced Steel Manufacturing Precinct (ASMAP) at Port Kembla.

CEO Mark Vassella said the transport logistics were too difficult - there was not a way to truck the parts out of Wollongong.

Bridges over the M1 were too low for the new generation of towers which would have a diameter of 6.5m, while Transport for NSW (TfNSW) advised other routes through Sydney were not appropriate.

But a BlueScope spokesman said a better location is still being sought - most likely in the Central West of NSW near Renewable Energy Zones.

"We main strongly committed to attracting a wind tower fabrication partner to establish a wind tower facility in NSW," he said.

"Whilst Port Kembla was always our preferred location, unfortunately the transport restrictions make that insurmountable.

"We conducted our own independent transport studies and invested a lot of time and money in exploring the opportunity but ultimately [it] just wasn't feasible."

The Flyers Creek wind farm - a 6000-hectare facility owned by Spanish giant Iberdrola which will comprise 38 turbines and have a maximum output of 145MW - is located about 25 kilometres south of Orange and had some of its turbines switched on in September, 2023.

While around 80 residents raised concerns at a meeting in October about a proposed wind farm project 21-kilometres north of Orange, at Kerrs Creek, which could house 63-turbines on nearly 10,000 hectares of land.

Looking at the BlueScope issue, Transport for NSW was cited in BlueScope's Environmental Impact Statement as saying alternative routes could not be used, a department spokeswoman on Thursday told ACM TfNSW was still working on it.

"The NSW Government is investigating several route options and road upgrades to support the movement of equipment for windfarms out of Port Kembla," she said.

"The challenge is to support the growth of this essential industry - a key government priority - whilst minimising the impact on local communities along key routes.

"In late 2022, Transport for NSW advised BlueScope Steel and the Department of Planning (DPE) that while we support renewable energy production, there were concerns about the movement of sections of equipment over five metres travel height on routes that are not approved for oversized or overmass vehicles.

"Transport provided formal advice on environmental assessment requirements to DPE, which highlighted the environmental and social impacts to these residents.

"The cost and impact of removing or lifting a bridge would be significant to the road network and local communities.

"Transport encourages Port Kembla to work with Transport and EnergyCo to undertake a joint study to identify the best solution."

The BlueScope spokesman said a local steel content was needed for wind towers to be built in NSW. The state does not have such a policy yet, unlike Victoria.

"Without adequate local content policy for wind towers, the point is moot as we can't attract a wind tower fabricator to partner with unless local content (at least 50 per cent) exists.

"Without it, 100 per cent of wind towers will continue to be imported into NSW. We will continue advocating for this with the NSW Government to try an stand up a new supply chain.

"We are committed to the wind tower opportunity to support the renewables transition and continue to invest in the planning for the Plate Mill Modernisation Project (as per our EIS), which is a foundation project to underpin steel supply for renewables."

BlueScope received a $55 million grant from the federal government in 2022 for the ASMAP project with the wind tower facility promising 140 permanent jobs.

The revised project will now create 18 permanent jobs, with an average of 60 (with a peak of 95) during the construction phase.

Without the wind towers the advanced manufacturing precinct becomes a more simple project, an upgrade of BlueScope's plate mill so it can increase its output with greater environmental efficiency.

South Coast Labour Council secretary Arthur Rorris said the transport problems strengthen the case for offshore wind farms to be built in the ocean, the same point made by Member for Wollongong Paul Scully on Wednesday.

"We are reaching the limits of our onshore transport infrastructure - the bridges are not tall enough for the ever increasing height of the onshore turbine systems and pretty soon the roads themselves will be straining to meet the renewable energy needs of the future," Mr Rorris said.

"This just highlights a major strength and advantage of offshore wind farms. There are no bridges over the ocean, or tight bends and resident noise and road access concerns to interfere with this necessary work."