‘Incentivising fossil fuels’: Fortescue Energy’s CEO Gus Pichot call on subsidies
Australia risks squandering its renewables advantage unless governments remove barriers that are slowing down critical infrastructure projects, Fortescue Energy boss warns.
Economy
How would you rate the momentum of the Australian economy as we head into 2026? Are cost pressures in your business: increasing/stable/easing? Are you likely to increase, hold steady, or trim your investment spend or employment over the next 12 months?
Australia is in a good place, but could be doing so much more to lead in green industry
and green energy. Momentum is currently being slowed down by consistent energy
policy, and approval delays.
Fortescue prides itself on its low-cost and disciplined approach to capital allocation. We
are taking a commercially focused approach to everything we do, including our
decarbonisation and growth strategies. We aren’t slowing down in our ambition, but
frugality is one of our core values as a business, and we apply that to everything we do.
Technology
Which best describes your organisation’s AI adoption? (Exploring/Piloting/Implementing selectively/Scaled across business) If implementing or scaled, are the productivity benefits starting to come through or do you expect more time for the full impact. Has the use of AI started to influence employment decisions across your organisation?
AI is already well embedded in our operations at Fortescue and used everywhere from
the pit to the port. It has already led to huge gains in productivity and efficiency and we
are continuing to look at new ways to integrate AI systems with our world-leading on the
ground expertise. AI is also playing a large role in our future growth opportunities
including in our battery intelligence software, which will help us make green energy and
green technology more cost-effective and competitive with fossil fuels.
People
Has your organisation evolved its approach to flexible working during the past year? Does your organisation have a policy around office attendance. What feedback, if any, do you have for governments considering prescribing working from home for a set amount of days per week?
We’re a business built on strong values, and face-to-face connection is an important
part of our culture. At the same time, we support flexible working and the benefits it
brings. That’s why we use guidelines rather than rigid rules – a balance that supports
flexibility while still recognising the operational reality of a 24/7 business where many
roles simply can’t be done from home.
Geopolitics
How significantly are global trade tensions/tariffs impacting your business? Is Australia getting the balance in managing its big economic and political relationships with major trading partners?
As a business, Fortescue always focuses on the things it can control, however we are
keeping a close eye on trade tensions, like any business. What we are doing to combat
any issues, is diversifying our partnerships and creating strong multilateral
relationships. We are doing this across all parts of our business, but especially in the
delivery of our 2030 decarbonisation strategy.
Energy
Do you have any concerns about Australia’s pathway to renewables? Should there be more flexibility in settings leading to 2035? Are energy costs becoming an increasing factor around your longer-term planning?
I think Australia’s ambition is now in the right space, but we still have some work to do
on the execution of the strategy to achieve what we are targeting. Renewable energy
firmed by batteries is right now the cleanest and lowest cost option to meet our targets
as a country, but we need to create smoother and faster routes to delivery and approval
to make that happen.
Australia needs to do more to enable green tech innovation. Removing outdated
subsidies like the Diesel Fuel Tax Credit would go along way to helping. We can’t
decarbonise and transition to a green future, if we are still incentivising fossil fuel use.
Reform
What would nominate as your top policy priority that can be used to lift
Australia’s competitiveness or productivity? Should The Albanese government
be pushing for even bolder policies around reform?
Australia needs to be looking at everything it can to remove barriers to rolling out low-
cost renewable energy. We have the technology we need ready now, but we’re too slow
in incentivising and getting projects up and running at scale.
If we want to compete globally, we need to make it faster and easier to build things in
this country. Removing outdated subsidies like the Diesel Fuel Tax Credit will go along
way to helping, we can’t expect business to decarbonise and transition to a green
future, if we are still incentivising them to keep using fossil fuels.
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