Fortescue Metals Group’s record profit will see the firm increase its spending on new green energy projects as it prepares to take on the significant emissions footprints of its customers and set a dedicated Scope-3 emissions target.
The business said that it will devote additional $1.03 billion in investment to its green energy subsidiary, Fortescue Future Industries, which it would use to fund both its own operations and new green hydrogen production and end-use technologies.
Next month, Fortescue will announce a Scope-3 emissions target, which will force the business to take on the significant task of reducing emissions inherent in its final products. The steelmaking activities of the corporation add over 250 million tonnes to the company’s current Scope-3 footprint.
Fortescue said in an updated climate change statement that it would target four key parts of its own business as part of its decarbonization efforts, including switching to renewable energy powering its sites and transitioning its vehicle fleet – including heavy vehicles used in mining operations – to electric and hydrogen fuelled models. Fortescue said it will keep investing in the development of ammonia-fueled locomotives and hydrogen-powered heavy gear.
Fortescue has already pledged to reinvesting at least 10% of its net after-tax revenues in its renewable energy subsidiary, Fortescue Future Industries, as the company strives to establish itself as a significant global supplier of zero-emission energy.
A strong 2020/21 financial result for the company will allow it to significantly increase its investments in renewable energy projects, with the company announcing a record after-tax profit of $10.3 billion – a 117% increase on the previous year – of which $1.03 billion will be made available to Fortescue Future Industries.
Fortescue said it already had plans for around $500 million in new clean energy spending, including the continued expansion of its green vehicle fleet, the development of new decarbonization technologies, and additional studies to identify new opportunities – similar to the feasibility study it completed into a potential renewable hydrogen hub in Tasmania.