FFI targets cost competitive green hydrogen by 2030 in new deal with Europe energy giant

Fortescue Future Industries has forged another global green hydrogen partnership, this time with the renewables arm of Italian energy giant, Enel, with the joint goal of making the zero emissions fuel cost-competitive this decade.

FFI said on Thursday that it would partner with Enel Green Power to explore co-development of the renewable hydrogen value chain, with an initial focus on Latin America and Australia.

The two companies say they share a “common view” on the key role of green hydrogen to decarbonise hard-to-abate sectors, where the elimination of emissions through electrification is not possible or is more complex.

Their key goal, however, is to make green hydrogen cost-competitive with fossil fuel-based alternatives during this decade.

Cost gap closing

Traditionally, the costs of green hydrogen production have been much higher than other forms, but soaring gas prices over the last year and huge investments by companies like FFI mean cost gaps are rapidly disappearing.

According to a recent Carbon Tracker report, the war in Ukraine has driven the cost of fossil hydrogen (blue and grey) 70% above pre-war levels, now making these assets more expensive than green hydrogen.

The report estimates that ongoing rapid capital investment in green hydrogen over the next few years could see its levelised cost fall under $US2/kg, making it one of the cheapest forms of energy.

FFI CEO Mark Hutchinson says that, with winter approaching in Europe, the need for competitive green energy solutions has never been more urgent.

A critical moment in energy

“This exciting announcement comes at a critical moment in energy,” Hutchinson said.

“Green hydrogen and green ammonia are part of the solution for not only energy security and lower energy costs, but also for fighting climate change

“With a strong proven record and dedication in green energy, Enel is the perfect partner to work with to make a green future a reality.”

FFI and Enel Green Power say the collaboration will kick off by establishing a framework for the two companies to identify and assess possible green hydrogen and/or ammonia projects.

At the same time, the companies will look to bring more large-scale production sites of green hydrogen and green ammonia to Latin America, as well as to Australia.

Big bets on green hydrogen

With the backing of billionaire founder Andrew “Twiggy” Forrest, FFI has been touring the world striking agreements with green hydrogen collaborators, customers and suppliers.

Notable deals include a massive MoU with Germany’s E.ON for five million tonnes of green hydrogen, and numerous plans in Australia for manufacturing of electrolysers, renewable energy production and industrial deals.

The team employed by FFI has grown to more than 1,100, and has a budget of more than $1 billion for the current financial year, including much of the $110 million to be spent on what is hailed as the world’s biggest hydrogen electrolyser plans in Gladstone.

In September, FFI announced plans to build a 9.2GW wind and solar facility to power green hydrogen production in Egypt, with an option to include local manufacturing facilities for wind and solar.

Enel, meanwhile, has been making its own advances into the green hydrogen sector. Last month, EGP announced that South Italy Green Hydrogen, a joint venture set up in partnership with Eni, had won €5.2 billion in EU funding.

One of the SIGH projects will install a 20MW electrolyser at a biorefinery in Gela, Sicily. Another, near Eni’s refinery in Taranto, will install a 10MW electrolyser. Both will use PEM (polymer electrolyte membrane) technology to make green hydrogen from renewable energy.

“We strongly believe that in the near future green hydrogen can play a strategic role in the decarbonization of global energy systems, complementing direct electrification,” said EGP CEO Salvatore Bernabei.

“This collaboration with a partner such as FFI fully fits within Enel’s hydrogen strategy to reduce the green hydrogen production cost, through the scale-up of technology and through innovative solutions.”