The Fortescue Metals Group Limited (ASX: FMG) share price is one to watch as it furthers its green hydrogen plans by partnering with Incitec Pivot Ltd (ASX: IPL).
Fortescue’s renewable energy segment, Fortescue Future Industries (FFI), is making waves in the renewable energy space. In the past week alone it purchased a 60% stake in a dutch energy tech company and announced plans to build the Global Green Energy centre (GEM) in Qld.
FFI describes itself as a “global renewable energy company” and is key to Fortescue’s 100% renewable green energy targets. This includes its recently announced target of net zero Scope 3 emissions by 2040.
Fortescue partners with Incitec Pivot
Fortescue Future Industries announced that it is partnering with Australia’s largest fertiliser supplier Incitec Pivot. The first step of the project is a feasibility study to convert the ammonia-production facility at Gibson Island in Brisbane to run on green, renewable hydrogen.
FFI said that the facility currently uses natural gas as a feedstock.
As part of the project, FFI plans to construct an on-site electrolysis plant. This will produce up to 50,000 tonnes of renewable, green hydrogen per year for conversion into green ammonia.
Preliminary results are expected to be available at the end of 2021.
Jobs and export market
If this project is successful, FFI expects that it will safeguard hundreds of manufacturing jobs in Queensland. It would also create a new domestic and export market for green, renewable ammonia.
Thinking ahead, FFI said that the resulting green ammonia could also provide a low-carbon fuel supply to the Port of Brisbane and Brisbane airport.
The company said that decarbonising existing industrial plants remains a major challenge in the transition to a green, renewable future. It aims to demonstrate that infrastructure conversion is technically and economically attainable whilst still projecting jobs.
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Final thoughts on the Fortescue share price
At this stage, FFI is still a reasonably small part of Fortescue’s business when compared to the immense scale of its iron mining operations. So FFI doesn’t seem to hold much weight yet when it comes to the Fortescue share price, which it is currently down 1.9%.
However, I am a shareholder of Fortescue and it is on my watch list for more, almost entirely for its FFI segment and long term future. It is possible that other investors are interested in Fortescue for the same reasons.
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