Fortescue Moves to Eliminate Fossil Fuel Risk

Fortescue Metals Group has announced it will invest US$6.2 billion by 2030 to eliminate the use of fossil fuels in its iron ore operations. This will enable FMG to supply its customers with a carbon-free product. The elimination of diesel, natural gas and carbon offset purchases from the supply chain is expected to reduce operating costs by $818 million per year.

Fortescue aims for net zero: “Net zero refers to no fossil fuels and, where possible, no offsets. Offsets should only be used as a temporary solution while the technology or innovation required for full decarbonisation is developed.” This is a critical step forward that many climate activists have been pushing for.

“Fortescue made the announcement at the invitation of US President Biden’s First Movers Coalition and the UN Global Compact, with the UN Secretary-General at the CEO’s Roundtable on ‘Business leadership to rescue the Sustainable Development Goals’. The strategy will see the company lead the market in terms of its response to growing expectations from customers, local communities and investors to reduce/eliminate CO2 emissions.

“Fortescue also announced that the Science Based Targets Initiative (SBTi) will verify and review its emissions reductions. This technical review initiative was launched to ensure companies meet their Paris Agreement targets of limiting global warming to 1.5 degrees.”

Twiggy Forest, executive chairman of Fortescue Metals Group, has previously made headlines with its gravity train, hydrogen-powered mining trucks and the conversion of its shipping fleet to run on green energy. Fortescue’s decarbonisation strategy and associated investment will enable the company to avoid 3 million tonnes of CO2 equivalent emissions per year.

Fortescue Metals Group intends to invest USD 6.2 billion in the years 2024-28. The money will be used to implement 2-3 GW of additional renewable energy generation and battery storage; and to upgrade the mine fleet and locomotives. It is expected that this will displace approximately 700 million liters of diesel and 15 million GJ of gas per year by 2030.

“We are already seeing direct benefits from the transition away from fossil fuels – we avoided 78 million liters of diesel consumption at our Chichester Hub in FY22 – but we must accelerate our transition to the post-fossil fuel era, which is driving global industrial change as climate change continues to worsen .It will also protect our cost base, increase our margins and exemplify that a post-fossil fuel era makes good commercial common sense,” said Fortescue Executive Chairman Dr Andrew Forrest AO.

Avoid the risk of fossil fuel

Image courtesy of Fortescue Future Industries.

“Fortescue, FFI and FMG are moving rapidly in transitioning 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 that is crucial for the energy transition.”

It is encouraging to see Australian mining companies making great strides towards the post-fossil fuel era. Fortescue’s announcement follows hot on the heels of recent announcements from BHP.

All diagrams courtesy of Fortescue Metals Group


 

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