• Fortescue has brought forward its carbon neutral target by a full decade, claiming it will achieve neutrality by 2030.
• The push will be accelerated by new plans unveiled by chair Andrew Forrest to push into green hydrogen and renewable projects to both use and produce clean energy.
• Forrest flagged green hydrogen particularly as a growth market for Fortescue, suggesting it could one day dwarf the miner’s iron ore business.
• Visit Business Insider Australia’s homepage for more stories.

Australia’s richest man Andrew ‘Twiggy’ Forrest has outlined a plan to pivot Fortescue towards a green energy future.

In an announcement on Monday, Forrest said the $63 billion iron miner would begin developing “green electricity, green hydrogen and green ammonia projects” in Australia.

“[It is] our commitment to demonstrate green hydrogen’s economic value in world-scale operations, and become a major energy exporter,” Forrest, who founded and chairs the company, said in a statement.

In doing so, Forrest said Fortescue would be on track to achieve carbon neutrality by 2030, a full decade earlier than previous commitments, and two decades before many in the mining sector.

“Our aim is to provide the two ‘missing links’ in the climate change battle, to create both the demand and the supply of green hydrogen,” he said. “Due to its high energy performance and environmental neutrality, green hydrogen and direct green electricity has the potential to eliminate fossil fuels from supply chains.”

By both producing and using clean energy, Forrest acknowledged that the miner would “also substantially reduce Fortescue’s operating costs” as well as offsetting the two million tonnes of greenhouse gas it produces annually.

But beyond budgeting, Fortescue sees ample opportunity in the relatively new market to not only diversify out of iron ore but grow its business.

“Green energy and industry initiatives may one day significantly outscale our iron ore business due to the global demand for renewable energy,” Forrest said.

While a bumper iron ore price has pushed both Forrest and Gina Rinehart to the top of Australia’s Rich List this year, it leaves the fortune of both firmly tied to the whims of the market.

But with Forrest claiming green hydrogen, “the purest source of energy in the world”, could become a $US12 trillion market, he eyes an opportunity worth chasing.

However, Fortescue’s plan does not consider in the carbon footprint of its customers, what’s often termed ‘Scope 3’ emissions.

It means that while Fortescue’s own operations may be carbon neutral, its clients, many of whom are Chinese steelmakers, can run at whatever carbon standards they see fit.

Such a stance has attracted staunch criticism from financial responsibility group Market Forces, which has previously claimed Fortescue’s targets focus on as little as one tenth of its value chain.

In a recent effort to pump up its environmental credentials, Forrest spent much of last year travelling, eventually contracting COVID-19, in a shopping trip to secure renewable assets.

A Tasmanian hydro project set to be its first acquisition of the new Fortescue Future Industries (FFI) venture, funded with as much as 10% of Fortescue’s profits each year, or roughly $1 billion in 2021.

For perspective, that’s almost as much as Twiggy pockets in dividends each year.

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