Fortescue scraps US, Australia green hydrogen projects
Australian iron ore miner and energy developer Fortescue will exit its planned PEM50 green hydrogen project in Australia’s northeastern city of Gladstone and its 80MW hydrogen hub near Phoenix in the US state of Arizona.
An evaluation is underway to repurpose the assets and the land, the company said, with a pre-tax write down of $150mn to be recorded to cover spending on equipment and engineering works.
Fortescue flagged it would backtrack on its hydrogen ambitions in May, when it ended plans to build proton exchange membrane (PEM) electrolysers at a factory in Gladstone. Instead, it plans to develop new technologies to “deliver green molecules at scale, efficiently and cost-effectively.”
The Perth-based company no longer needed to develop PEM50 as it is moving away from the technology in a strategic shift.
“We remain committed to disciplined growth, underpinned by targeted research and development that unlocks innovative solutions to drive down costs and deliver our green metals and green energy goals,” Fortescue’s growth and energy division chief executive Gus Pichot said on 24 July.
PHH was expected to produce 11,000 t/yr, eligible for the $3/kg 45V clean hydrogen production tax credit, Fortescue had said when making a final investment decision on it and PEM50 in 2023.
But uncertainty around US energy policy has slashed green hydrogen investments, with the Congress this month voting to hasten expiration of the 45V subsidy.
Fellow Perth-headquartered hydrogen aspirant Woodside Energy, a major LNG producer, on 23 July cancelled its green hydrogen project in the US — the 60 t/d H2OK proposal in Oklahoma.
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