Fortescue Future Industries has progressed its efforts to establish itself as a leading global supplier of green hydrogen after lining up a potential supply deal with German polymer producer Covestro.
FFI announced on Monday that it had signed a memorandum of understanding for the supply Covestro – which produces a range of raw polyurethane and polycarbonate materials – with up to 100,000 tonnes of green hydrogen annually to replace existing supplies of fossil hydrogen starting in 2024.
FFI chairman Andrew Forrest said the MoU – which will see the two companies negotiate the terms of a supply deal – had the potential to deliver significant reductions in greenhouse gas emissions at the polymer producer’s facilities across Asia, North America and Europe.
“This is a ground-breaking collaboration which reinforces the power of green hydrogen to accelerate the decarbonisation of some of the most energy-intensive industries around the world,” Forrest said.
“FFI and Covestro share the belief that green hydrogen and green ammonia will play a crucial role in enabling companies to reach their climate targets and preventing runaway global warming.
“We look forward to working with Covestro to supply their green hydrogen needs and collaborating with Germany to enable it to become the world leader in global decarbonisation, green hydrogen and ammonia.”
Covestro, headquartered in the German city of Leverkusen, produces high-tech polymer materials, including polyurethane and polycarbonates, used in a range of commercial and consumer goods. Polyurethane made by Covestro was used in the production of the official footballs used at the 2014 FIFA World Cup.
Covestro CEO, Markus Steilemann, said that the non-binding agreement with FFI could ultimately help the company improve the sustainability of its products and cut its greenhouse gas emissions footprint by up to 900,000 tonnes per year.
“Our collaboration with FFI underlines our ambition to pioneer the transition towards a circular economy and climate-neutral production. Green hydrogen and its derivatives play a key role for the chemical industry, both as an alternative feedstock and a source of clean energy,” Steilemann said.
“The transition towards green hydrogen and its derivatives will be an important step forward in our efforts to offer more sustainable products that also reduce the carbon footprint of our customer industries.”
The agreement follows several recent deals struck by FFI as part of its push into green hydrogen production and use.
This includes a plan to convert part of a New Zealand oil refinery to operate as a green hydrogen production facility and to provide a potential lifeline to a Brisbane ammonia factory through the supply of renewable hydrogen after the plant struggled to secure affordable supplies of fossil gas.
Just before Christmas, FFI revealed it had built its own operational electrolyser for hydrogen production as a demonstration of Fortescue’s ability to deploy its engineering resources to develop solutions in the clean energy space, alongside its operations in the resources sector.
FFI has expressed ambitions of becoming one of the world’s largest manufacturers of electrolyser equipment, securing planning approval to build a gigawatt scale facility in Gladstone in Queensland.
FFI’s investments in green hydrogen production are in effect being funded by the profits of the parent Fortescue Metals Group – Australia’s third-largest iron ore producer – which has pledged to re-invest 10 per cent of its earnings into the green energy offshoot. In 2021, this amounted to more than $1 billion.
The resources company has set itself a goal to produce 15 million tonnes of green hydrogen annually by the end of this decade, growing to 50 million tonnes annually by 2040 – eyeing an early opportunity to establish itself as a dominant player in a burgeoning global market for green hydrogen.
FFI CEO Julie Shuttleworth said the latest deal showed the potential for green hydrogen to create opportunities for decarbonisation in otherwise tricky industries for cutting emissions.
“Covestro is a global leader in its field with its materials used in nearly every area of modern life, including in the automotive, construction and electronics industries,” Shuttleworth said.
“This collaboration reinforces that green hydrogen is a practical, implementable solution for a range of difficult-to-decarbonise industries.”
