Could Fortescue (ASX:FMG) be about to announce its next major green initiative?

The green division of Fortescue Metals Group Limited (ASX: FMG), called Fortescue Future Industries (FFI), may soon be launching a new green initiative.

Fortescue’s founder and Chair Andrew Forrest is scheduled to speak at the Queensland Media Club in Brisbane later today. According to reporting by The Australian, it is possible that a new investment in renewable energy in Queensland may be announced.

What is Fortescue Future Industries?

Fortescue says that FFI is taking a global leadership position in green energy and green technology, leading the effort to decarbonise hard-to-abate sectors.

FFI is investing to create a global portfolio of green energy projects to supply 15 million tonnes per year of renewable green hydrogen by 2030.

The green division is working on a number of initiatives to help Fortescue decarbonise as well as helping the world decarbonise in various other ways.

For example, it has recently successfully completed the first phase of studies with Incitec Pivot Ltd (ASX: IPL) to convert the Gibson Island ammonia production facility to be powered by green hydrogen. The next phase is to progress the project to a front end engineering design study to refine cost, schedule, permitting and commercial agreements.

In terms of decarbonising its operations, it has recently progressed rail decarbonisation initiatives with the arrival of two additional ‘four stroke’ locomotives for testing on a blended ammonia fuel system, and in January 2022 announced the purchase of two battery electric locomotives for delivery in 2023.

In January 2022, Fortescue announced that it had entered into an agreement to acquire Williams Advanced Engineering (WAE). WAE will be vertically integrated into Fortescue and will be managed via FFI which will utilise WAE’s critical technology and expertise in high-performance battery systems and electrification to accelerate the decarbonisation of Fortescue’s iron ore operations.

How does Queensland factor into FFI’s plans?

Queensland was the location of the first announced Fortescue Future Industries global green energy manufacturing (GEM) centre in Gladstone, Queensland. The first stage of development is an electrolyser manufacturing facility with an initial capacity of two gigawatts per annum with an investment of up to US$83 million by FFI.

The GEM will be the first in a series of centres that will “transform regional Australia through the manufacture of equipment that is critical to the generation of renewable energy and green hydrogen”. Not only will there be electrolyser manufacturing, but also wind turbines, solar photovoltaic cells, long-range electric cabling, electrification systems and associated infrastructure.

Subject to customer demand, as orders firm for both electrolysers and the associated green industry, the investment could be up to US$650 million.

The Australian reported that the theme of the media lunch in Brisbane is “Queensland’s green energy future” which will be about ways to make the state a green energy powerhouse.

The post Could Fortescue (ASX:FMG) be about to announce its next major green initiative? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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