We're sure they all have the polar bears in mind. Pic: Getty
Green Energy: FMG announces green hydrogen progress and more join the net-zero bandwagon
Energy
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• FMG announce progress on green hydrogen and ammonia initiatives
• Carnarvon Petroleum states net zero 2050 ambition
• More ASX-listed companies raise ESG banner
• Monash launches hydrogen cost assessment tool
FMG makes progress on green energy initiatives
Fortescue Metals Group (ASX: FMG) and its chairman Andrew Forrest have been among the loudest proponents of the hydrogen industry, forming a new technology division last year to generate and develop ideas to green up its 170Mtpa iron ore business.
It now says the Fortescue Future Industries arm has made headway on a number of problems, including the design and construction of hydrogen powered haul trucks and drill rigs, two areas of the mining industry which rely heavily on diesel fuels.
The company also says it has successfully combusted ammonia as a locomotive fuel, with testwork underway on a combustion device to use it as a fuel for shipping.
That would lay the groundwork for an ore carrier running on so-called “green ammonia” (note, current commercial ammonia production processes contribute to around 1.8% of global carbon emissions) with in principle design approval already in place.
To round it off there’s some interesting developments at the test scale with green iron and green cement.
On top of that the AFR reported this week that Andrew Forrest was going in on green investments by tipping US$50 million into Bill Gates’ Breakthrough Energy Ventures fund, whose investors include Amazon’s Jeff Bezos and board member Jack Ma of Alibaba fame.
Whether the announcement engendered a positive response from the market was hard to tell, and the fact it was not considered price sensitive says something about just how small a part of FMG’s multi-billion dollar iron ore business FFI currently is.
With iron ore up marginally overnight BHP, Rio and MinRes all enjoyed gains of similar magnitude to FMG’s 1.06% rise this morning.
But carbon neutrality, or at least a company’s ability to show greening efforts to investor, is clearly now a significant investment metric for major companies going forward.
“We are leading by example to decrease emissions across our operations, using our large industrial platform of operating mine sites in the Pilbara to trial and demonstrate technologies in completely renewable green hydrogen, green ammonia and green electricity,” FMG CEO Elizabeth Gaines said.
“All of us at Fortescue are committed to its decarbonisation. Our great progress to date and our ongoing projects underpin Fortescue’s plan to become a major renewable energy and industry product exporter.
“As part of this plan, we are aiming to meet or beat our internal global industry leading target to achieve carbon neutrality by 2030.”
FMG share price today:
Carnarvon claims net zero target
Tis the season apparently, with oil field developer Carnarvon Petroleum (ASX: CVN) among the latest companies to declare an intention to get to net zero by 2050.
At the moment that just means offsets from its head office in Perth, but that will become a more complex equation from late 2023, when it will have completed the redevelopment of the Buffalo oil field in the Bonaparte Basin and late 2025, when first production occurs at Dorado.
Majority owner Santos (ASX: SAN) expects to make a final investment decision next year on the US$2 billion Dorado oil field, where it announced the start of front end engineering design in June and expects to produce 75,000-100,000 barrels a day once its first stage is fully operational.
The initial solution Carnarvon is pursuing is an investment in so-called “renewable diesel”, forming a joint venture with privately owned climate advisory and investment firm Frontier Impact Group on a plant that would process biomass into fuel, biochar and wood vinegar.
The biochar would be processed further into graphene for use in electronics and batteries among other things.
Carnarvon will invest $2.6m in seed capital in the 50-50 JV with FIG, which will also look to get carbon credits and engage in things like tree planting to improve its offsets.
However, Carnarvon boss Adrian Cook said the company’s focus remains on its O&G assets.
“Carnarvon holds equity in the world-class Dorado field that recently entered the formal development engineering and design phase,” he said.
“We are also preparing to drill two exciting exploration prospects near Dorado and, as the operator, drill the Buffalo-10 well with the view to redeveloping the Buffalo field. Our focus on these first-rate projects has not diminished in any way.”
“We believe this opportunity makes strong business sense for Carnarvon. There is a clear link between the delivery of our core projects, securing carbon offsets for these through this venture and producing valuable products such as renewable diesel.”
Carnarvon Petroleum share price today:
But wait, there’s more
Rounding off the O&G-hydrogen mash-up on the ASX today, oil and gas royalty play High Peak Royalties (ASX: HPR) announced an MoU for investment and royalty rights on a future “green hydrogen” project.
The project, owned by a company called Scimtek, proposes to incorporate a new catalyst and use biomass methane in the steam methane reforming process currently used to create 95% of the world’s hydrogen (a process normally powered with fossil fuels).
Most projects term marketed as green hydrogen projects to date have instead been based on the electrolysis of water into its components of hydrogen and oxygen by passing an electric current generated by renewable energy sources like wind or solar.
And Mineral Resources (ASX: MIN) announced its subsidiary Energy Resources has secured a rig to drill a conventional gas exploration well in the Perth Basin, where it holds the Lockyer Deep prospect in an 80-20 JV with Norwest Energy (ASX: NWE).
Chris Ellison’s MinRes are in the crowd claiming natural gas is the pathway to transition diesel burning infrastructure to “net zero”. The iron ore, lithium miner and mining services provider too has a net zero by 2050 target.
“We are fully committed to achieving Net Zero Emissions by 2050 and believe owning our own natural gas supply will complement the significant advances we are making in renewable energy, particular around solar and wind power,” Ellison said.
Will grid scale hydrogen cost me an arm and a leg?
A big day for proponents of green hydrogen on Friday, with a consortium led by under-fire energy major Shell launching the largest electrolyser in Europe in Germany, a 20 million Euro 10MW development which will produce 1300tpa of hydrogen a year.
Located near Cologne it could be scaled up to 100MW over time.
The obvious knock on green hydrogen and electrolysis remains its cost and whether it can be delivered at large enough scale to become commercially competitive with ‘grey hydrogen’, developed from oil and gas feedstocks.
The Australian Government and its clean energy agencies have a “stretch target” of $2/kg of hydrogen as the magic number. ARENA currently views the cost of green hydrogen as between $6-9/kg.
Monash University researchers have developed a new open source tool with Geoscience Australia called the Hydrogen Economic Fariways Tool to assess the cost of proposed large scale green hydrogen projects in 2030 terms.
The models they have run on the don’t appear to quite get there yet re: the Government’s target.
It estimates areas with the best mix of wind and solar PV potential could generate costs as low as $2/kg based on assumptions from Bloomberg Energy Futures and project renewable power deployment, rising to just below $3/kg when transport and the cost of water is taken into account.
