Fortescue Metals Group, a miner managed by Australia’s wealthiest men, has announced its ambitious goal of curbing the environmental footprint of iron ore by reforming itself as a clean energy company.
The Perth-based group on Tuesday Scope 3 net zero emissions by 2040 Hydrogen made from renewable energy is used to produce “green” iron and ultimately steel.
“Fortescue has begun the transition from a pure iron ore producer to a green renewable energy and resource company,” said Elizabeth Gaines, CEO of FMG.
Steelmaking accounts for about 7-9% of all direct fossil fuel emissions, and major iron ore producers should address so-called Scope 3 emissions (greenhouse gases emitted from the products they sell) from investors. I’m under pressure. These are 20 times the operational emissions.
FMG’s promise sets it apart from Australia’s major rivals, BHP and Rio Tinto. They have not set absolute targets for Scope 3 emissions and instead are working with customers to reduce carbon strength in steel production by 30% over the next decade.
Andrew Forrest, the founder of FMG and a billionaire businessman with a 36.7% shareholder, is taking a different approach. He believes that decarbonization of the steel industry could be a major source of profit for the company.
Through a new division called Fortescue Future Industries, FMG will produce 15 million tons of green hydrogen annually by 2030 by using renewable energy to separate oxygen and hydrogen atoms from water in a device called an electrolytic cell. I am planning to do it.
To fund the project, FMG has informed investors that it will invest 10% of its annual returns into FFI. Against the backdrop of record iron ore prices, FMG reported a pre-tax profit of $ 14.7 billion over the year to June.
Forrest, the chair of FMG, not only supplies green hydrogen domestically and internationally, but also uses the fuel to manufacture green irons, sell them to customers, and supply them directly to the electric arc furnace (EAF) to produce steel. I want to manufacture it.
this is An alternative to the traditional steelmaking process Here, in a huge blast furnace, metallurgical coal is combined with iron ore to release molten pig iron, which is refined into steel.
“Our work … FFI CEO Julie Shuttleworth said:
However, there are important challenges to overcome. According to experts, FMG will need two to three times as much electricity as Australia’s current electricity supply to reach its goal of producing 15 million tonnes of green hydrogen annually by 2030.
BHP believes that blast furnaces will account for more than half of steel production in 2050, as Asian steelmakers are reluctant to switch to EAF given the younger fleet. Instead, they believe they will pursue CO2 reduction options.
The Australian Corporate Responsibility Center, a shareholder activist group, welcomed the announcement of the FMG.
“BHP and Rio Tinto need to be embarrassed to lose to what was once called a’junior minor’,” said Group Climate and Director Dan Gotcher. “It’s time for BHP and Rio Tinto to set binding targets for Scope 3 emissions, rather than simply funding research and collaborating with customers.”
Last month, influential deputy advisor Glass Lewis told clients: Vote against BHP’s Climate Transition Action Plan at next month’s Annual Meeting, citing concerns about plans to address Scope 3 emissions.
Separately, on Tuesday, 28 of the world’s largest mining companies promised to achieve net zero emissions from operations by 2050.
However, the International Council on Mining and Metals, which includes BHP and Rio as members, has stopped promising a Net Zero goal for Scope 3. Instead, its members will set scope 3 goals by the end of 2023.
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