In Gladstone, Queensland, Fortescue Metals Group will construct a $1 billion factory to manufacture electrolysers that produce hydrogen from water. In what will be a frenetic nine-year dash into the unknown, the commitment to more than treble global output is his most concrete move yet.
“Electrify everything” and guarantee that energy comes from renewable sources is a frequent catchphrase for reducing greenhouse gas emissions.
When it comes to solar, wind, or hydropower, electric automobiles, induction cooktops, and reverse-cycle air conditioners for heating all check the boxes.
Hydrogen is viewed as a solution to issues that electrons cannot address, such as providing high-temperature heat for industries such as steel mills and storing energy in situations where batteries would be too big, such as long-distance transportation.
Dr. Forrest’s desire for Fortescue to enter the hydrogen market quickly and on a large scale distinguishes the business from other heavyweights in Australia’s Pilbara resource heartland.
Gina Rinehart, who grew up on a Pilbara cattle ranch and went on to become an iron ore millionaire like Dr. Forrest, rejects the climate research that motivates Dr. Forrest as propaganda.
The corporate actors acknowledge the science but respond in a more measured manner than Fortescue.
Due to the high cost of hydrogen and the large installed base of traditional coal-burning blast furnaces with decades of useful life left, BHP does not anticipate it to make significant inroads into steel production for another 20 to 30 years.
BHP CEO Mike Henry said last week at a mining conference in London that until hydrogen arrives, BHP’s “higher-quality hard coking coals” will help decrease emissions at its steel mill customers.
Woodside’s two LNG plants in the Pilbara port of Dampier are just a few kilometers from where Rio Tinto delivers its iron ore. Woodside, like BHP, believes that its present product has a role in a future with low emissions.
The LNG producer is pursuing blue hydrogen, which is created from its gas with related emissions either caught and stored or offset, as well as green hydrogen, which is made with renewable power and is pushed by Fortescue.
Both blue and green hydrogen are considered pure by the gas business, but for Dr. Forrest, the distinction is black and white.
Dr. Forrest remarked in June that calling gas-based hydrogen “clean” was a “huge deception” similar to calling coal “clean.” In August, researchers from Stanford and Cornell institutions in the United States discovered that blue hydrogen might create more pollutants than burning gas.
While the gas sector slammed the study, it did illustrate the challenge of dealing with the several sources of pollutants when hydrogen is produced from gas.
Fortescue has targeted more aggressive carbon reductions for its own Scope 1 and 2 emissions, in addition to forsaking gas and coal.
Fortescue accelerated its already aggressive 2040 aim for zero direct emissions to 2030 in March. BHP and Woodside, on the other hand, only plan a 30% reduction in direct emissions by the end of the decade, deferring net-zero until 2050.
Fortescue upped the ante this week, targeting net-zero Scope 3 emissions by 2040, while most businesses fine-tuned their objectives for direct emissions reductions.
Fortescue’s steel mill clients will need to invest a lot of money to convert from coal to hydrogen, and it aims to help by delivering 15 million tonnes of green hydrogen per year by 2030.
In the Pilbara, an international partnership plans to invest $US36 billion ($49 billion) to create 1.5 million tonnes of green hydrogen per year, which will be used to make ammonia for export.
The Asian Renewable Energy Hub will need the installation of 1743 wind turbines and 25 million solar panels over the next decade, and will not be fully operational until 2037.
The center will have a power generating capacity of 26 gigawatts, greater than China’s 22.5 gigawatt Three Gorges Dam, which is the world’s greatest energy generator.
Fortescue aims to produce 10 times the hydrogen production of the Asian Renewable Energy Hub in nine years.
Fortescue’s recent acquisition of two massive swaths of mining exploration licences in WA’s north suggests the corporation is considering establishing its own hubs.
It will be nearly difficult to build the equivalent of ten hubs by 2030. Before building could begin, years of effort would be necessary to acquire environmental clearances and land tenure.
Julie Shuttleworth, CEO of Fortescue Future Industries, a clean energy division of Fortescue, said the firm has a plan to generate 15 million tonnes of green hydrogen annually by 2030 from locations across the world close to market demand.
Ms Shuttleworth stated, “FFI is quickly growing renewable energy and green hydrogen projects, which will result in about 300 gigawatts of electricity capacity.”
“We are evaluating a scheme to develop a 250-megawatt green hydrogen facility in Bell Bay in Tasmania alone.”
Instead of building a massive wind and solar farm, Fortescue only requires modest industrial property near power lines and a port to house hydrogen electrolysers and a facility to convert hydrogen into ammonia for shipment.
Fortescue wants to make a decision on Bell Bay this year, but it’ll need 1200 of them to meet its 300-gigawatt goal.
Dr. Forrest’s recent overseas trips included a lot of visits to countries with hydropower potential.
Fortescue has been investigating hydropower prospects with the Papua New Guinea government for the past year. Dr. Forrest announced in June that Fortescue had acquired the rights to the Grand Inga Dam in the Democratic Republic of Congo.
Fortescue is doing more than chasing hydropower and land in WA’s north to create renewable energy.
FFI is aiming to utilize green ammonia to power the trucks, trains, and ships that transport iron, in order to reach net-zero direct emissions by 2030. FFI also intends to make iron and cement with minimal emissions.
And now it’s moving into manufacturing in Gladstone, which is a world apart from mining and energy.
Any one of these goals is a huge technological challenge in and of itself, requiring the integration of a wide range of specialized expertise and equipment.
While some people think of Fortescue as a mining business, Dr. Forrest defines it as a “heavy industrial, heavy manufacturing company.”
Yesterday, Dr. Forrest’s reason was clear: “I assure you…we will not let the planet to continue to boil.”
Millions of people with similar worries will be rooting for him to succeed. Investors in a Pilbara iron ore miner, not an ambitious vertically integrated global renewable energy behemoth, will be similarly disappointed.