Fortescue sees first major hydrogen project within next 9 months

Credit: Fortescue Metals

Fortescue Future Industries will announce its first major clean energy project within the next nine months, as the unit of Fortescue Metals Group Ltd. attempts to reach its ambitious green hydrogen production goals.

“We’ve got a couple of projects which are getting very close to first investment decision, and so we’re looking to do that certainly over the next nine months or so to have those announcements out there,” Guy Debelle, chief financial officer of FFI and former deputy governor of the Reserve Bank of Australia, said in an interview with Bloomberg TV.

Fortescue Chairman Andrew Forrest, Australia’s richest person, launched FFI in 2020 with an ambitious goal to produce 15 million tons of green hydrogen by 2030, requiring the company to build around 200 gigawatts of renewable energy — more than double Australia’s current coal-centered power generation. The group has signed non-binding supply deals with buyers including Germany’s E.ON SE, but is yet to begin work on any large-scale renewables projects.

“We’re looking at large projects all around the world,” Debelle said on the sidelines of a Citigroup Inc. investment conference in Sydney on Thursday. “We’re looking at accelerating those projects, get them happening, get the learnings from doing those projects, and most importantly get that green energy out there.”

Debelle said there were large pools of capital that wanted to invest in major clean energy projects, but the money would go where the returns were highest. He said tax breaks from the US Inflation Reduction Act and pro-climate policies in Europe made those jurisdictions more attractive than Australia, which lacks such aggressive incentives.

“If we don’t have a constructive environment here, we will see those pools of capital deployed into the US or Europe, even though Australia is, in my mind, one of the most cost competitive places,” he said.

He dismissed suggestions the current global energy supply crunch would derail the transition to clean energy, saying on the contrary high fossil fuel costs would drive investment into lower cost renewables.

Debelle joined FFI earlier this year from the RBA, where he had led the central bank’s work on climate risk. A lifelong central banker, his departure came as a surprise to many as he had been widely seen as favorite to take the top job when current governor Philip Lowe steps down.

“The space I’m in now is about the future of the planet, which is a fairly important thing to be involved in,” he said. “So I’m very happy to have made the transition to something which is critically important for the future.”

(By James Fernyhough)

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