Andrew “Twiggy” Forrest’s Fortescue Metals Group has given itself eight years and a budget of around $9 billion to eliminate fossil fuel use and achieve zero terrestrial emissions.
When that happens, Fortescue says it will be supplying its customers with a carbon-free product by 2030.
Forrest presented his vision at a closed-door session with UN Secretary General António Guterres ahead of a big UN autumn meeting in New York on Monday.
He said the company’s plan would involve spending $US6.2 billion to cut its operating costs by $US818 million a year by 2030.
The bulk of the company’s investment would be spent between 2024 and 2028 on rolling out 2 to 3 gigawatts of renewable energy generation and battery storage to power a green mining fleet, electrifying its rail locomotive ore haulage system in the process.
Studies are under way to optimise localised wind and solar resources in and around the company’s iron ore operations in the Pilbara.
“We must accelerate our transition to the post-fossil-fuel era, driving global-scale industrial change as climate change continues to worsen,” Forrest said at a CEO roundtable as part of US President Joe Biden’s First Movers Coalition and the United Nations Global Compact.
“This is an investment that I think every company in the world ought to make, and an investment which, now that you can see that it can be done, every heavy industry should step out and do,” Forrest said.
Fortescue says its plan would dispense with about 3 million tonnes of carbon dioxide emissions a year through the displacement of about 700 million litres of diesel and 15 million GJ of gas.
“We are already seeing direct benefits of the transition away from fossil fuels – we avoided 78 million litres of diesel usage at our Chichester Hub in FY22, but we must accelerate our transition to the post fossil fuel era, driving global scale industrial change as climate change continues to worsen,” Forrest said.
“It will also protect our cost base, enhance our margins and set an example that a post-fossil-fuel era is good commercial, common sense.”
“There’s no doubt that the energy landscape has changed dramatically over the past two years and this change has accelerated since Russia invaded Ukraine,” Forrest said.
Fortescue shares fell 0.8% to $17.30 on Tuesday.
The only way for this to be verified over coming years will be for Fortescue to arrange an annual independent audit of its energy use and transition. That will help protect itself against the inevitable claims from critics about the progress of the company’s transition.
Australian companies large and small are coming under greater scrutiny for their ‘green’ claims and the head of competition regulator the ACCC has made it clear the organisation won’t hesitate to act if it finds company claims not backed up by evidence.
ACCC chair Delia Rickard said businesses that make false or misleading claims undermine consumer trust and confidence in the market.
Greenwashing is giving a false impression or providing misleading information about how an organisation and its offerings are environmentally friendly.
“Unfortunately, the ACCC is hearing growing concerns that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences,” Ms Rickard said.
“Broad terms like ‘environmentally friendly’, ‘green’, or ‘sustainable’ have limited value and may mislead consumers, as they rarely provide enough information about what that exactly means in terms of the product or service consumers are considering purchasing.”
Rickard said businesses should provide evidence to back up their claims, whether through reliable scientific reports, transparent supply chain information, reputable third-party certification, among others. “Where we have concerns, we will be asking businesses to substantiate their claims,” she said.
“The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims,” Ms Rickard added in a speech delivered on Tuesday.
