Mining billionaire Andrew Forrest’s Fortescue Metals has cut 90 jobs from its green hydrogen division, following a warning in April that global headwinds were causing it to reassess various projects and investments.
The mining company on Wednesday confirmed that jobs had been cut, including at its Gladstone PEM50 electrolyser project in Queensland. The Australian newspaper earlier reported job losses also occurred at a Western Australian hydrogen division, and total jobs lost amounted to around 90 positions.
It is now refocusing on R&D, rather than manufacturing, the company says.
“Fortescue is focused on establishing a green iron industry in Australia, with green hydrogen playing a critical part in making it a reality,” a company spokesperson told Renew Economy in a statement.
“To ensure we can produce the large amounts of green hydrogen we need to make green iron, we are refocusing our efforts into the research and development of new technologies that will deliver green molecules at scale, efficiently and cost-effectively.”
Foreshadowing as headwinds blow
It’s news that was foreshadowed by Fortescue Energy CEO Mark Hutchinson two weeks ago, who said timelines are being “adjusted” for the multi-billion dollar Green Energy project to decarbonise the company’s mining operations.
It’s reassessing the Arizona green hydrogen project and the Gladstone PEM50. Fortescue anticipates having greater clarity on the impact of external factors on these projects by the end of the financial year.
“Fortescue Energy is continuing to progress and refine its Green Energy project pipeline in a disciplined manner, with timelines adjusted to reflect global market conditions and uncertain policy settings,” Hutchinson said in a statement at the time.
Still finding a place
There have been major headwinds against green hydrogen both in Australia and globally.
Electrolyser makers have been struggling to climb out of the valley of death created by over-hyped expectations in 2021, and potential end-buyers of green hydrogen have been slow to tie themselves to a still early stage industry.
The uncertain policy settings Hutchinson referred to in April include moves by US President Donald Trump which have turned the US from a market that Forrest himself preferred over Australia to one where all clean energy projects are on shaky ground.
Trump’s Inflation Reduction Act pause didn’t affect hydrogen tax credits but did halt grant and debt funding for companies such as electrolyser maker Plug Power, which is desperately in need of cash, and tariffs have jammed up already fragile supply chains.
And notwithstanding the Australian federal production tax credit of $2/kg for gas made from 2027, passed in February, other political moves have put major projects in jeopardy.
Also in February, Queensland’s “Newman-redux” Crisafulli government cancelled funding for state-owned Stanwell Corporation’s CQ-H2 green hydrogen project at Gladstone.
In May, the South Australia state government disbanded its Office of Hydrogen Power following after canceling what would have been a world-first green hydrogen power plant and large hydrogen electrolyser facility at Whyalla.
The $600 million Hydrogen Jobs Plan was to come online in early 2026, but has now been redirected to deal with the financial collapse of the Whyalla Steelworks.
But Fortescue is still somewhat positive on the sector, with the statement repeating the line that “green hydrogen is the fuel of the future”.
It also added a mysterious rider that the company has advanced its electrolyser technology capabilities, the science has evolved, and they’re moving with it.
