Fortescue takes steps 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 allows 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 US$818 million per year.

Fortescue strives for real zero: “Real zero refers to no fossil fuels and no compensation where possible. Offsets should only be used as a temporary solution while the technology or innovation needed to fully decarbonise is developed.” This is a crucial step forward that many climate activists have pushed for.

Fortescue made the announcement at the invitation of US President Biden’s First Movers Coalition and the United Nations Global Compact, with the United Nations Secretary-General at the CEO Roundtable on ‘Business Leadership to Drive the Sustainable Development Goals’ to save’. The strategy will ensure the company leads the market in terms of its response to growing customer, community and investor expectations to reduce/eliminate carbon emissions.

“Fortescue also announced that the Science-Based Causes Initiative (SBTi), will verify and audit its emissions reduction. This technical audit initiative is designed to ensure companies meet their Paris Agreement target of limiting global warming to 1.5 degrees.”

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

Fortescue Metals Group plans to invest US$6.2 billion in the years 2024-28. The money will be used to deploy an additional 2-3 GW of renewable energy generation and battery storage; and to upgrade the mining fleet and locomotives. This is expected to displace approximately 700 million liters of diesel and 15 million GJ of gas per year by 2030.

“We are already seeing immediate benefits from the fossil fuel transition – we avoided using 78 million liters of diesel in our Chichester Hub in FY22 – but we need to accelerate our transition to the post-fossil fuel era and drive global industrial change if climate change continues. worsen. It will also protect our cost base, improve our margins and set an example that a post-fossil fuel era is good commercial and common sense,” said Fortescue Executive Chairman Dr. Andrew Forrest AO.

Avoiding the risk of fossil fuels

Image courtesy of Fortescue Future Industries.

“Fortescue, FFI and FMG are moving at high speed to become a global green metals, minerals, energy and technology company, capable of supplying not only green iron ore, but also the minerals, knowledge and technology critical to the energy transition.”

It’s heartwarming to see Australian mining companies major steps towards the post-fossil fuel era. Fortescue’s announcement follows on the heels of recent announcements by BHP.

All charts courtesy of Fortescue Metals Group


 

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