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Released September 27, 2022 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--One of Australia's leading metals and mining companies, Fortescue Metals Group,
is planning to spend more than US$6 billion on hitting ambitious decarbonisation targets.
The company has set aside US$6.2 billion to decarbonise its mining operations by eliminating fossil fuel use and achieving net zero emissions across its iron ore operations by 2030. The company made the pledge in New York recently as a part of President Joe Biden's First Movers Coalition and the United Nations Global Compact. The company already has a separate business called Fortescue Future Industries (FFI) that is actively investing in wind, solar, battery storage and hydrogen projects.
This investment, to be spent mainly from 2024-28, includes the deployment of an additional 2-3 gigawatts (GW) of renewable energy generation and battery storage, along with the estimated incremental costs associated with deploying a green mining fleet and locomotives.
When fully implemented, Fortescue expects its decarbonisation strategy to deliver "significant environmental and economic returns by 2030." These include the avoidance of 3 million tonnes of CO2 equivalent emissions per annum and net operating cost savings of US$818 million per annum from 2030, based on the current costs of fossil fuels like diesel and gas as well as eliminating the cost of carbon credits for emissions. Today, the company is using roughly 700 million liters of diesel and 15 million gigajoules (GJ) of gas per annum. It also claimed that the shift will protect the company from the price volatility of fossil fuels and the company's exposure to price risks associated with relying on carbon offsets and carbon tax regulation changes.
"There's no doubt that the energy landscape has changed dramatically over the past two years and this change has accelerated since Russia invaded Ukraine," said Fortescue Executive Chairman Andrew Forrest. "We are already seeing direct benefits of the transition away from fossil fuels - we avoided 78 million liters of diesel usage at our Chichester Hub in FY22 - but we must accelerate our transition to the post fossil fuel era, driving global scale industrial change as climate change continues to worsen. It will also protect our cost base, enhance our margins and set an example that a post fossil fuel era is good commercial, common sense."
Industrial Info is tracking all of the key projects currently underway and planned by Fortescue Future Industries. These include its Green Energy Manufacturing Center, which will see the construction of a 2-GW green hydrogen electrolyser at Gibson Island, Queensland. For additional information, see September 7, 2022, article - Australia's AGL Plans Green Hydrogen Facility at Liddell Coal-Fired Plant.
Fortescue's energy subsidiary, Pilbara Energy, is at the early stages of its huge Uaroo Renewable Energy Power Hub project which includes a grassroot 2,040-megawatt (MW) windfarm in the first phase, as well as a 3,333-MW solar PV farm and the 4,000-MW Uaroo Battery Energy Storage System (BESS).
Forrest added: "Consistent with Fortescue's disciplined approach to capital allocation, this investment in renewable energy and decarbonisation is expected to generate attractive economic returns for our shareholders through energy cost savings and a sharp reduction in carbon offset purchases, together with a lower risk cost profile and improvement in the integrity of our assets."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The company has set aside US$6.2 billion to decarbonise its mining operations by eliminating fossil fuel use and achieving net zero emissions across its iron ore operations by 2030. The company made the pledge in New York recently as a part of President Joe Biden's First Movers Coalition and the United Nations Global Compact. The company already has a separate business called Fortescue Future Industries (FFI) that is actively investing in wind, solar, battery storage and hydrogen projects.
This investment, to be spent mainly from 2024-28, includes the deployment of an additional 2-3 gigawatts (GW) of renewable energy generation and battery storage, along with the estimated incremental costs associated with deploying a green mining fleet and locomotives.
When fully implemented, Fortescue expects its decarbonisation strategy to deliver "significant environmental and economic returns by 2030." These include the avoidance of 3 million tonnes of CO2 equivalent emissions per annum and net operating cost savings of US$818 million per annum from 2030, based on the current costs of fossil fuels like diesel and gas as well as eliminating the cost of carbon credits for emissions. Today, the company is using roughly 700 million liters of diesel and 15 million gigajoules (GJ) of gas per annum. It also claimed that the shift will protect the company from the price volatility of fossil fuels and the company's exposure to price risks associated with relying on carbon offsets and carbon tax regulation changes.
"There's no doubt that the energy landscape has changed dramatically over the past two years and this change has accelerated since Russia invaded Ukraine," said Fortescue Executive Chairman Andrew Forrest. "We are already seeing direct benefits of the transition away from fossil fuels - we avoided 78 million liters of diesel usage at our Chichester Hub in FY22 - but we must accelerate our transition to the post fossil fuel era, driving global scale industrial change as climate change continues to worsen. It will also protect our cost base, enhance our margins and set an example that a post fossil fuel era is good commercial, common sense."
Industrial Info is tracking all of the key projects currently underway and planned by Fortescue Future Industries. These include its Green Energy Manufacturing Center, which will see the construction of a 2-GW green hydrogen electrolyser at Gibson Island, Queensland. For additional information, see September 7, 2022, article - Australia's AGL Plans Green Hydrogen Facility at Liddell Coal-Fired Plant.
Fortescue's energy subsidiary, Pilbara Energy, is at the early stages of its huge Uaroo Renewable Energy Power Hub project which includes a grassroot 2,040-megawatt (MW) windfarm in the first phase, as well as a 3,333-MW solar PV farm and the 4,000-MW Uaroo Battery Energy Storage System (BESS).
Forrest added: "Consistent with Fortescue's disciplined approach to capital allocation, this investment in renewable energy and decarbonisation is expected to generate attractive economic returns for our shareholders through energy cost savings and a sharp reduction in carbon offset purchases, together with a lower risk cost profile and improvement in the integrity of our assets."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
