Fortescue Metals (ASX:FMG) Vows To Go Carbon Neutral by 2030, 10 Years Ahead of Target

Source: jittawit21,Shutterstock

Summary

  • Fortescue Metals Group aims to achieve carbon neutrality 10 years ahead of its original target in 2040.
  • To achieve the new industry-leading target, the company is trialling and demonstrating green hydrogen technologies in commercial environments.
  • The targets are planned to be incorporated in the formal remuneration structure.

Australian iron ore producer Fortescue Metals Group Ltd (ASX:FMG) has accelerated its battle towards defeating climate change by announcing a new industry-leading target.

In an upbeat market update on 15 March 2021, the company unveiled its revised target to achieve carbon neutrality by 2030, 10 years ahead of the earlier plan. The company plans to incorporate the target into its formal remuneration structure, including incentives for the short and long-term.

Fortescue Future Industries (FFI) – the key enabler of the target

FMG is engaged in trialling and demonstrating green hydrogen technologies in world-class operations. Additionally, the company is rapidly evolving into an executor of green hydrogen projects of similar scale, said FMG Chairman Andrew Forrest.

Interesting Read: Climate Change to impact Australian economy: time to bring in robust changes

FMG’s wholly owned subsidiary Fortescue Future Industries (FFI) is harnessing the global undeveloped renewable energy resources for developing green hydrogen and other green industrial products. It will be engaged in developing green electricity, green hydrogen, and green ammonia projects across Australia including Tasmania.

The subsidiary is working on plans to build large-scale renewable energy and green hydrogen production capacity, which is expected to advance the substitution of green hydrogen and green ammonia for carbon-based fuels. Aided by the governments across the country, the projects are likely to make a significant contribution towards lowering national carbon emissions.

Key Projects to Achieve the Target

Fortescue Metals Group is undertaking to deliver several key projects by the stretch target of 30 June 2021, including -

Source: ASX update, dated 15 March 2021

Must Read: Forrest goes green with Fortescue’s foray into renewable energy sector

All the projects are expected to contribute to the global inexorable march to carbon neutrality, said Fortescue CEO Elizabeth Gaines. The focus will be on ensuring that the business operates the major steel, truck, train, ship, and mobile plant industries with renewable, environmentally friendly energy.

Fortescue Future Industries will use commercial-scale equipment to undertake the trials, designed to prove that the demand for direct green electricity, green ammonia and green hydrogen is likely to become as large as the fossil fuel industry in the upcoming period. 

The projects are an addition to the company’s significant investment with its partners into energy infrastructure.

Fortescue will undertake independent verification to monitor the progress to carbon neutrality target.

Stock Information – FMG was trading at AUD 20.340 on 15 March 2021, down by 4.328 per cent from its last closing price. The company has a market capitulation of AUD 65.45 billion and an annual dividend yield of 11.61 per cent.

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