Fortescue Metals Group Limited (ASX: FMG) announced this week a significant new green hydrogen partnership involving Fortescue Future Industries (FFI).
Fortescue signs deal with E.ON
Fortescue Future Industries and E.ON have signed a memorandum of understanding to partner together to deliver up to 5 million tonnes per annum of green, renewable hydrogen to Europe by 2030.
E.ON is one of Europe’s largest operators of energy networks and energy infrastructure and a provider of customer solutions for 50 million customers.
Each side has committed to a research and study partnership, with further detailed documentation and steps required related to supply.
Fortescue stated that this partnership to strengthen security of green energy supply at a time when Europe needs to reduce its energy dependence on fossil fuels from Russia as quickly as possible.
Five million tonnes per annum (mtpa) of renewable green hydrogen is equal to approximately one third of the calorific energy Germany imports from Russia.
Both companies will work together, in collaboration with their governments, regarding how to achieve supply as fast as possible. FFI said this will help decarbonise thousands of medium-sized enterprises all over Germany and the Netherlands and other European cities and communities to which E.ON distributes energy.
Leadership commentary
FFI Chairman and founder Dr Andrew Forrest said:
The announcement of this historic partnership today aims to diversify the future energy security in Europe. Green energy will reduce fossil fuel consumption dramatically in Germany and quickly help substitute the Russian energy supply, while creating a massive new employment intensive industry in Australia. This is a cohesive and urgently needed part of the green industrial revolution underway here in Europe.
E.ON itself said that it foresees a rapidly increasing demand for renewable green hydrogen, especially in its industrial client base.
Summary thoughts
This is an important deal for Fortescue. The stated 5 million tonnes is a significant chunk of the 15 million tonnes of renewable green hydrogen that Fortescue wants to produce by 2030.
It’s deals like this that will help Fortescue become one of the most prominent global players in the green hydrogen sector. However, I’m not jumping on the Fortescue share price just yet.
