Fortescue Metals Group to exit fossil fuels by 2030: Twiggy

Iron ore magnate Andrew Forrest has blasted fellow billionaire Elon Musk for dismissing hydrogen as a promising source of ‘green energy’, as the Fortescue chairman laid out an ambitious new plan to completely remove fossil fuels from Fortescue’s production by 2030.

In New York City to tout his company’s new US$6.2bn investment plan to fully replace diesel and gas with solar and wind energy within eight years, Mr Forrest took a swipe at Mr Musk’s disdain for ‘green hydrogen’, whose development Fortescue has advocated and invested heavily in.

Mr Forrest, who announced his “decarbonisation” plan in a closed door session with the United Nations Secretary General on Monday, said Mr Musk was “a good guy but has a business model which depends only on batteries, and hydro fuel cells harm that business model”.

“He should get out and ask himself ‘am I really a climate avenger of just a businessman?’; if he knocks hydrogen then we know he’s just in it for a buck,” Mr Forrest told The Australian.

Mr Musk, one of the world’s richest men and chief executive of electric car maker Tesla, in May publicly slammed hydrogen fuel cells as “the most dumb thing I could possibly imagine for energy storage.”

“I really can’t emphasise this enough — the number of times I’ve been asked about hydrogen, it might be … it’s well over 100 times, maybe 200 times,” Mr Musk said.

The Perth-based iron ore exporter, of which Mr Forrest is a one third shareholder, said in a statement to the stock exchange on Monday (Tuesday AEST) it would spend US$6.2bn to slash its operating costs by US$818 million per year by 2030.

“This is a sound commercial responsible investment for all stakeholders. It replaces billions of dollars we’ve wasted never to be seen again with green energy,” Mr Forrest said, referring to the $2.7bn a year the company was currently spending on diesel and gas.

Fortescue, a longstanding champion of climate change mitigation strategies, said the plan emerged at the invitation of President Joe Biden’s First Movers Coalition, a global group of 25 large businesses that undertook in November last year to demonstrate how businesses could slash carbon dioxide emissions in their own supply chains.

The Fortescue plan, once fully implemented, would dispense with around 3 million tonnes of carbon dioxide emissions annually, through the displacement of around 700 million litre of diesel and 15 million GJ of gas, the company said.

“We must accelerate our transition to the post fossil fuel era, driving global scale industrial change as climate change continues to worsen,” Mr Forrest said in a statement.

Complaints about the inadequacy of battery technology were an “excuse for the industry”, Mr Forrest said. “We don’t have to wait until 2050, we can do it now; the technology is here today”.

“Fortescue is moving at speed to transition into a global green metals, minerals energy and technology company, capable of delivering not just green iron ore but also the minerals, knowledge and technology critical to the energy transition”.

Fellow Australian iron ore giants Rio Tinto an BHP have expressed reservations about the potential for hydrogen to make Australia “the Saudi Arabia of green energy”.

Mr Forrest dismissed concerns China’s demand for iron ore, still Australia’s biggest export, would slump as its population started to decline and its economic growth inevitably slowed amid fears of a major property slump.

“They might be overplaying their zero Covid hand, but we haven’t seen that, we have long term orders and lots of enthusiasm,” he said.

Foreign minister Penny Wong and energy minister Chris Bowen also arrived in New York this week to participate in United Nations General Assembly High Level week, an annual jamboree set aside for every September where politicians and diplomats compare notes and catch up face-to-face.