Iron ore billionaire Andrew Forrest says his company, Fortescue Metals, hopes to be producing green hydrogen at commercial scale as early as 2023, and plans to use much of that hydrogen to make green steel in Australia.
He also announced the company would now aim to achieve carbon neutrality on its scope 1 and 2 emissions by 2030, bringing the target forward 10 years. Most of that would be done through absolute emissions reduction rather than the use of offsets.
Both targets will require a rapid upscale of Fortescue’s renewable capacity. The company has huge ambitions in this area, and says it has identified a 300 gigawatt pipeline of potential, including 40GW in the Pilbara, and hopes to build as much 1,000GW in the longer-term.
But so far few are up and running, with only the soon-to-be opened 60MW Chichester solar farm and a new 150MW solar project, both to help power its Pilbara mines, identified to date. Monday’s announcement contained no major new project announcements.
In a wide ranging call with media on Monday, Forrest called it “an historical day,” as he predicted many more large industrial players would follow Fortescue in embracing net-zero technologies.
Asked when Fortescue would start bringing green hydrogen to market in Australia, he said the company was currently working with governments to get the approvals needed and was “working hard towards” production by 2023.
While hydrogen has immense appeal as a carbon-free alternative to fossil fuels, doubt has been cast on its viability in some sectors, particularly against electrification, which is much more energy efficient.
A recent report from the International Council on Clean Transportation found that green electricity would prove significantly cheaper than hydrogen for heating homes in Europe, while Volkwagen chief Herbert Diess last week dismissed the idea the hydrogen fuel cells would ever compete with battery electric vehicles.
But Forrest said there would be a major role for green hydrogen and ammonia in industries such as heavy transport, including road, rail and shipping, as well as steel production. And he insisted demand would follow supply.
“We aim to provide the two missing links in the climate change battle – creating both the demand for and supply of green hydrogen and green ammonia,” he said.
The company is trialling green ammonia in shipping and locomotives, hydrogen fuel cell power for drill rigs, and large battery technology in its haul trucks. It is also trialling a technology that uses renewable energy to convert iron ore to green iron at low temperatures, without the use of coal.
Forrest re-asserted his belief that Australia should be a green steel-making nation and that, provided the economics stacked up, Fortescue would become a vertically integrated green steelmaker, using the green hydrogen generated from its own renewable energy capacity to transform the iron ore that it mines in the Pilbara into steel.
“The technology in this space is changing super fast,” he said. “Once the world started to look at the fact that there’s other ways to make steel – we don’t have to just accept it has to be coal-based – then innovative technologies have started to spring up everywhere. I think we have a chance of Fortescue being on the leading edge of that.
“I do see Fortescue having a really serious advantage – it has the resources, it has the energy, it has the iron ore, it has the people, it has the capital to lead a new industry which the world, frankly, really badly needs.”
He dismissed predictions from other iron ore miners that metallurgical coal would still be used in 30 years, predicting it would be replaced entirely by green hydrogen by 2050.
“You have never had an abundant supply of a coal alternative, and until you have an abundance of something you can’t have a demand for it. Think of the Internet. [You] didn’t have any demand until it existed. We are creating a supply of green fuels through green hydrogen, green ammonia and direct green electricity which didn’t exist before.
“Former calculations have been made without today’s historic announcement. As of today’s announcement, all of those calculations will have to change.”
Fortescue also announced on Monday it would start linking executive pay to its emissions targets, providing an extra incentive to hit the 2030 goal.
Asked about the use of offsetting residual emissions through activities like tree-planting Forrest said: “We’re not ruling it out, but we are working really hard to limit its use. As Bill gates says, there is no point in thinking you are helping reduce the carbon footprint of the planet by planting a tree where a tree would grow anyway.”
The carbon neutrality target only applies to scope 1 and 2 emissions. Scope 3 emissions are Fortescue’s largest, because they include the emissions created in the steelmaking process. Globally, steelmaking accounts for something like 7 to 9 per cent of global industrial emissions. Forrest said Fortescue was addressing scope 3 by creating a market for green hydrogen.
