22/01/2021 - 15:10

Forrest takes on Elon Musk

22/01/2021 - 15:10

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Andrew Forrest has asserted that his mining company will do more to tackle climate change than electric car maker Tesla and revealed plans to start building Australia’s first ‘green’ steel plant this year.

Forrest takes on Elon Musk
Andrew Forrest said Fortescue was studying ways to make steel without using coal.

Andrew Forrest has asserted that his mining company will do more to tackle climate change than electric car maker Tesla and revealed plans to start building Australia’s first ‘green’ steel plant this year.

Mr Forrest used the ABC’s annual Boyer lecture, which was recorded last night and scheduled to be broadcast tomorrow, to map out his ambitious plans to produce green energy and transform the steel industry.

In doing so, he took aim at both Elon Musk, who heads market darling Tesla, and the oil and gas industry, which he said was peddling false information.

Mr Forrest was dismissive of Tesla, and by implication producers of all electric cars.

“Its major climate innovation is a battery that runs on whatever fuel is in the national grid – instead of a fuel tank,” he said.

“I think the real climate change challenger could be Fortescue.”

He said the big profits generated by Fortescue Metals Group, in which he is chairman and major shareholder, gave it the capacity to invest in new technologies.

“Based on this position of strength, the Fortescue leadership recently decided to have a crack at becoming one of the world’s largest green energy and product businesses,” he said.

“To catalyse a global solution to climate change – by rapidly increasing the supply of green hydrogen.”

(Green hydrogen refers to hydrogen gas that is produced using renewable energy. The hydrogen is a fuel source that can replace fossil fuels.)

Mr Forrest’s speech comes shortly after he returned from a five-month global trip, in which he visited form than 30 countries to evaluate renewable energy and green industry opportunities.

And he has previously dislcosed that Fortescue has committed to spend $1 billion on decarbonisation and hydrogen R&D over the next three years.

He acknowledged that Fortescue produced two million tonnes of greenhouse gas each year but said it planned big changes.

“The question wasn’t whether green hydrogen would become the next global energy form,” he said.

“It was which company would have the resilience to take the risk and truly test green hydrogen at global, industrial scale?

“The board and I decided Fortescue would be that first mover.”

He said Fortescue was undertaking feasibility studies that could lead to 300 gigawatts of renewable power, which could be used to produce green hydrogen.

“We have targeted hydro-electricity, generated by rivers, and geothermal, which taps into the heat from the Earth’s core.”

Mr Forrest said Fortescue was also studying ways to make steel without using coal.

He said one option was to replace coal with green hydrogen, while a second more radical option was to scrap the blast furnace and "zap" the iron ore with renewable electricity.

“Fortescue is trialling both methods,” he said.

“We aim to start building Australia’s first green steel pilot plant this year, with a commercial plant in the Pilbara, powered entirely by wind and solar, in the next few years.”

Mr Forrest said if Australia could attract 10 per cent of the global steel market, it could generate more than 40,000 jobs.

He added that Fortescue was aiming to convert its trucks, trains and ships to renewable energy.

“But where will we get all our green energy from?

“In the Pilbara, Fortescue is designing vast wind and solar farms that can generate over 40 GW of power – more than half of what Australia can make now.”

Mr Forrest said he had never invested in coal and was a qualified supporter of the gas industry.

“I’ve never invested in coal even though I knew years ago it would have doubled the cash flow of our company.

“I’ve made an allowance for natural gas, as a critical stepping-stone, but only because the infrastructure can easily be adapted to green hydrogen.”

Mr Forrest predicted that the fossil fuel sector would react to falling green hydrogen prices by slashing the cost of oil and gas until it was almost zero.

“At the end, it will be grim – think of a knife fight in a telephone box,” he said.

“And Big Oil’s last stand will be to use fossil fuels to create blue hydrogen – storing the emissions in the ground and peddling it as clean energy.

“But it’s not clean energy and governments are already falling for it.

“So-called blue hydrogen just displaces the pollution from one part of the world to another. It’s the same dog, just a different leg action.

“And it’s not just the oil companies we need to be wary of. Self-interest will be everywhere.

“Elon Musk recently called hydrogen fuel cell cars - despite the 8 million that will soon be on the roads - “mind-bogglingly stupid”.

“He has every reason to fear them.

“His description is perhaps better suited to someone who peddles a battery technology as green, when it runs on fossil fuel.”

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