Mining tycoon Andrew Forrest puts money where his mouth is on green hydrogen

No one can accuse Andrew Forrest of lacking ambition.

The billionaire businessman made his fortune breaking up Western Australia’s iron ore duopoly of mining powerhouses BHP Group and Rio Tinto – something skeptics said was impossible.

He now wants to make another fortune by helping save the planet and transforming the mining company he controls – Fortescue Metals Group – into a world leader in renewable energy, and specifically green hydrogen.

On a recent visit to London for the FT Hydrogen Summitthe Aussie discussed his plans for FMG, hit out at companies promoting blue hydrogen and questioned Tesla’s Elon Musk green credentials.

Forrest counts his unit of green energy, Fortescue Future Industriescan go from a stalled start to producing 15 million tonnes per year of green hydrogen by 2030, just 5 million tonnes less than the target set by the European Commission over the same period .

He believes green hydrogen can be produced where there is access to cheap renewable energy and then exported to the rest of the world as ammonia or other hydrogen derivatives. According to him, it will become a globally traded commodity.

Not everyone shares his confidence. According to some academics, turning sunlight into hydrogen, then ammonia, and finally electricity, results in energy losses of more than 80%. Even so, many proponents believe it could be successful if paired with carbon pricing.

To this end, FFI has already signed a long list of non-binding supply agreements, including agreements with the German utility company Eon and the British company JCB.

Analysts estimate Forrest will need to build around 200 GW of wind and solar capacity to meet its 2030 target, at a cost that could reach hundreds of billions of dollars.

Forrest believes green hydrogen can be produced where there is access to cheap renewable energy and then exported to the rest of the world © Michael Sohn/AP

When asked how he plans to fund his plans, Forrest pointed to FMG’s annual results, noting that the company revenue generated before interest, taxes and amortization last year of $16 billion and $10 billion in net profit after taxes, due to higher iron ore prices.

“Look, I’ve built $50 billion worth of iron ore infrastructure in the Pilbara,” he said at the London summit. “I am very used to executing large capital projects at a cost that is only a fraction of what our competitors are doing.”

Of his deal with Germany’s Eon, Forrest said: “They asked for 5 million tons [of green hydrogen a year by 2030] and they will get it.

To support the nascent green hydrogen industry, Forrest called on governments to provide the appropriate policy support. He cited the US tax credit worth up to $3 per kilogram for clean hydrogen and Germany’s contracts for difference – a subsidy that guarantees a minimum price to producers – as good examples.

He said blue hydrogen, which is produced from natural gas and uses carbon capture and storage technology to manage emissions, was a dangerous distraction that risked “crushing legitimate green businesses and initiatives”. claiming to be low carbon.

Forrest said he has yet to meet a scientist who believes gas buried underground, thanks to CCS technology, leaks at less than 1% per year, warning that “it leaks much faster than that” .

“That means it all comes back in the exact century you’re supposed to get rid of it,” he said. “It’s not carbon sequestration, it’s greenwashing.”

Responding to recent comments from Tesla’s Elon Musk that hydrogen fuel cells, which can be used to power trucks and cars, are “appallingly stupid”, Forrest said electric vehicles weren’t always so environmentally friendly. the environment that describes.

“He [Musk] knows that almost anytime a Tesla is plugged into almost any grid in the world, it’s just burning coal, oil and gas,” he said. “I mean, it does nothing for the environment. So his “mind-boggling stupid” is whitewashed.

Asked about his recent decision to take over the reins of FMG as executive chairman, Forrest said that greening a “truly successful and globally respected” mining company was two huge jobs.

“One, to retain that reputation and grow it; and the second, to make it all green,” he said. “The FFI business is scary. . . because you are dealing with new technology that is rapidly evolving before your eyes. So for the next two or three years, I just don’t want to leave it to chance. I want to be there to guide the company like I did at the start.

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