An energy company backed by mining magnate Andrew “Twiggy” Forrest that focuses on large-scale renewable hydrogen projects has made its first investment in America, sinking $35 million into a proposed green hydrogen project near Phoenix in Arizona.
Fortescue Future Industries (FFI) said on Thursday it had acquired the Phoenix Hydrogen Hub, which is developing an 80 megawatt electrolyser and liquefaction facility capable of producing up to 12,000 tonnes of liquified green hydrogen annually.
Green hydrogen, made by using a renewable-energy-powered electrolyser to split water into hydrogen and oxygen, is seen as a promising alternative to carbon-emitting fossil fuels used in heavy transport, heating, other manufacturing processes, and power generation.
But green hydrogen faces significant barriers to becoming a dominant energy source because it is prohibitively costly to make compared with “grey hydrogen,” which is produced from gas in a process that emits carbon dioxide into the atmosphere.
FFI’s charge into the US hydrogen market follows the introduction of the Inflation Reduction Act, a cornerstone policy of US President Joe Biden that is supercharging America’s clean energy economy and giving priority to new energy sources and prompting investment from Australian mining and power firms with expertise in critical minerals and renewable energy.
Biden’s policy offers companies billions of dollars in tax credits and grants to build hydrogen hubs, so the US can reach a target of producing 50 million metric tons of clean hydrogen fuel by 2050.
FFI chief executive Mark Hutchinson said the first green hydrogen from the Pheonix hub was expected to be produced by the middle of this decade.
“FFI is actively expanding its US presence and strengthening its position as a leading global developer of green energy production and technology,” Hutchinson said.
The Phoenix facility was sold by an affiliate of Nikola Corporation, a heavy-duty commercial battery-electric vehicle maker.
Nikola will be a potential customer for the hub’s liquified green hydrogen in refuelling stations in California and America’s southwest.
The Phoenix hub is currently in the end stages of its permitting process and will go to Fortescue’s board for a final investment decision this year. Forrest is leading a multibillion-dollar push to diversify iron ore giant Fortescue Metals Group, one of the largest Australian producers of iron ore, into green hydrogen through investments by FFI.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Source: Thanks smh.com