Despite multiple setbacks, Andrew “Twiggy” Forrest, founder of Fortescue Metals Group, has remained one of the world’s most prominent champions of green hydrogen.
In 2021, Forrest unveiled plans to produce 15 million tonnes of green hydrogen annually by 2030.
Forrest recognised green hydrogen as a vital answer for decarbonising industries like steel, shipping, and heavy transportation, which are tough to reduce.
Fortescue Future Industries (FFI), the company’s green energy branch, was supposed to lead the change with projects in Australia, the United States, and other continents.
However, Fortescue has scaled back its hydrogen ambitions, citing challenging market conditions, limited technological adoption, and high energy costs.
The corporation announced 700 job layoffs and abandoned significant projects, including:
- Gladstone, Queensland’s PEM50 electrolyser plant
- Arizona Hydrogen Project in the United States
The Australian government is currently demanding repayment of grants related to the abandoned Gladstone project.
Despite these challenges, Forrest remains devoted to green hydrogen.
“Our vision for Fortescue has not changed. I truly believe in the power that green hydrogen will unlock for decarbonising hard-to-abate industry”, Forrest said in 2024.
Last month, Forrest restated his support for green hydrogen, telling investors that it remains “key” to Fortescue’s future, despite the company walking away from numerous high-profile projects and reducing employment in the industry over the last year.
However, speaking in New York on Monday night, Forrest omitted green hydrogen from its plan to cut emissions.
“The company’s latest climate transition plan, unlike the 2024 version, makes no mention of the potential to access the Federal Government’s hydrogen production tax credit scheme”, The West Australian reported.
“The tax credits were estimated to cost the Australian taxpayer $6.7 billion between 2027 and 2040”.
“The scheme involves an uncapped refundable tax offset of $2 per kilogram of renewable hydrogen produced for up to 10 years per project. For a project to be eligible it has to reach a final investment decision stage by 2030”.
Forrest’s green hydrogen ambitions were always a fantasy.
EnergyQuest reported in March that Forrest’s and the government’s 15 million tonne green hydrogen target would require twice as much electricity to produce as Australia does in a year.
“A key drawback of the existing green hydrogen production process is that a considerable portion of the renewable energy used to produce the hydrogen is lost in the production process,” EnergyQuest said.
“It takes around 45 kilowatt hours to produce one kilogram of green hydrogen, but that one kilogram can only be used to generate 30kWh of electricity, and production of green ammonia involves a further 13-25% energy loss.”
EnergyQuest estimates that the electricity required to generate 15 million tonnes of green hydrogen—the federal government’s target by 2050—would exceed more than double Australia’s total annual electricity generation.
The poor economics of green hydrogen have led to the widespread cancellation of projects throughout Australia and globally, including in China.
According to the Australian Financial Review, “more than 130 projects linked to hydrogen have received federal taxpayer money going back to 2017, according to the government’s grants register. While many pre-date this government, easily the largest came after the 2023 budget frenzy”.
In March, The Australian reported that 99% of the announced hydrogen capacity had not moved beyond the concept stage.
Despite the repeated failures, Minister for Climate Change and Energy Chris Bowen promised to waste more taxpayer money on the green hydrogen fantasy, pledging $432 million to revive the Hunter Valley Hydrogen Hub and promising “long-term, high-quality jobs for the region, while decarbonising industries that are vital to our economy”.
The truth is that green hydrogen is not economically viable. It is expensive to manufacture, transport, store, distribute, and use.
“Converting electricity to hydrogen and back to usable energy wastes a substantial portion of that original energy”, reported Clean Technica in March. “Essentially, it’s a leaky bucket scenario—by the time you’re done transporting and converting hydrogen, you’ve lost around two-thirds of your initial energy input”.
“Advocates often fall victim to the “appeal to future possibilities” fallacy, painting a glowing image of a hydrogen economy without honestly confronting today’s technical and economic realities”, Clean Technica wrote.
I recommend listening to the Baseload Podcast’s interview with Tom Biegler, former CSIRO Divisional Chief (minerals and energy).
Biegler dispels the idea that green hydrogen is a feasible technology in Australia.
Neither Chris Bowen nor Twiggy Forrest appears to consider the realities of renewable energy, let alone the costs to consumers and taxpayers.
