Fortescue also confirmed on Thursday it would not proceed with another of its hydrogen projects – a part-built $140 million plant in Gladstone, Queensland, which has been mothballed since May – after deciding not stick with a specific type of hydrogen-production technology it planned to trial there.
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Pichot stressed that Fortescue was “not giving up” and believed green hydrogen was key to its future.
“Being first isn’t always easy, but to succeed, we must remain nimble and frugal with the resources our shareholders have entrusted with us,” he said.
“Technology is improving at rapid speed – the cost will come down, and the market will come, but we must also be realistic and disciplined.”
Most of the hydrogen produced across the world today is limited to “grey hydrogen”, made from gas through a process that emits carbon dioxide into the atmosphere. Fortescue’s ambitions focus on “green hydrogen”, produced when renewable energy is used to separate water into hydrogen and oxygen, making the product emissions-free.
The Albanese government has promised billions of dollars to support nascent industry in the push to turn Australia into a leading supplier of green hydrogen.
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However, significant barriers to the viability of green hydrogen remain: the biggest being that it still costs much more to make than hydrogen produced from fossil fuels.
Early-stage green hydrogen projects have been stalling in Australia and across the world, as developers struggle to find enough customers due to the high production cost and challenges involved in transporting the fuel.
Fortescue told investors on Thursday it expects to take a pre-tax writedown of $US150 million on the two abandoned hydrogen projects in Arizona and Queensland.
Earlier this week, Woodside Energy, the largest Australian oil and gas company, said it had decided to walk away from a liquid hydrogen project it had been planning in the US state of Oklahoma, citing high costs and a lack of customers.
While Woodside did not link its decision to Trump’s anti-green-energy agenda, the company said in January it needed to assess the implications of his administration’s plans to remove support for clean energy, including his halting of the disbursement of funds from the $567 billion Biden-era Inflation Reduction Act.
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