The Fortescue Metals Group Ltd (ASX: FMG) share price is marching higher in early trading on Wednesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) miner closed yesterday trading for $20.58 each. Shares are currently changing hands for $20.60 apiece, up 0.1%.

For some context, the ASX 200 is down 0.32% at this same time.

The Fortescue share price looks to be getting support from some big renewable energy spending plans contained in the 2023 federal budget.

$2 billion for green hydrogen in 2023 budget

Well, the 2023 budget is out.

And as you’d expect with any multi-billion-dollar federal government spending package, there are winners and losers.

Many companies involved in renewable energy look to be on the winners’ side of the coin, with Treasurer Jim Chalmers unveiling plans to invest an additional $4 billion in Australia’s renewable energy sector.

In what could provide some ongoing tailwinds for the Fortescue share price, that spending includes $2 billion to support green hydrogen production in a new program called Hydrogen Headstart.

The Australian government is playing catchup with the United States. The Biden administration recently passed the Inflation Reduction Act, which includes more than $500 billion in green energy incentives.

Commenting on the green hydrogen funding contained in the 2023 budget, Energy Minister Chris Bowen said (quoted by The Australian Financial Review):

Our regions need to be supported to harness their immense potential, build new industries and create jobs – because the regions that power Australia today will be the regions that power Australia tomorrow…

Renewable hydrogen is a critical enabler for future manufacturing of green metals and other products the world needs as the transformation to net-zero by 2050 gathers pace.

The government is forecast to commence direct investments into renewable hydrogen in 2026.

Why could this benefit the Fortescue share price?

The Fortescue share price could be a long-term winner from the 2023 budget via the company’s green energy branch, Fortescue Future Industries (FFI).

FFI is a front-runner in Australia in the production of green hydrogen.

Hydrogen can be created by running electricity through water, which divides the water into hydrogen and oxygen. That hydrogen carries the vaunted green label if the electricity is tapped from renewable sources, like solar, wind, hydropower, or geothermal energy.

According to the Fortescue website, “Through FFI, Fortescue will use green hydrogen to decarbonise the company’s mining and shipping fleet including trucks, drill rigs and trains.”

Founder Andrew Forrest is also keen on producing green iron. In March, the ASX 200 miner announced a major breakthrough in its green iron production plans.

FFI director Guy Debelle called the 2023 budget’s green energy funding, which looks to be supporting the Fortescue share price today, “a great first step”.

According to Debelle (quoted by the AFR), “It shows the government recognises the importance of the green hydrogen economy. It’s about future prosperity and decarbonising the economy.”

Fortescue share price snapshot

The Fortescue share price is up 8% over the past 12 months, handily outpacing the 3% gains posted by the ASX 200 over that same period.

The post Fortescue share price lifts on 2023 budget’s $2 billion hydrogen program appeared first on The Motley Fool Australia.

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More reading

• What’s the forecast for the Fortescue share price this month?
• 5 things to watch on the ASX 200 on Wednesday
• Fortescue’s Twiggy could wipe this ASX 300 share from the bourse. Here are the details
• Why the iron ore price is ‘not out of the danger zone’
• Here’s what brokers are saying about the Fortescue share price in May

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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 Scott Phillips.

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