Fortescue has acquired a minority stake in a hydrogen technology company, as the miner’s clean energy division seeks to position itself to capitalise on soaring demand for fossil fuel substitutes.
Fortescue Future Industries will spend $1.8 million to acquire a 20 per cent stake in Sparc Hydrogen, which has an exclusive licence to develop and commercialise green hydrogen technology created by the University of Adelaide and Flinders University. FFI has the option to increase its stake to 36 per cent for an additional $1.475 million.
Sparc Hydrogen is researching technology which could see green hydrogen produced by only sunlight and water, instead of using electrolysis powered by renewable sources.
Should the technology prove viable, Fortescue would have capacity to produce hydrogen without the need for electrolysers, which are typically expensive and require substantial energy.
When powered by renewable energy, the electrolyser – which splits hydrogen from water – does not produce emissions. The process can, however, also be powered by fossil fuels.
“There is irrefutable scientific evidence that the planet is warming. Green hydrogen is a practical, implementable solution to decarbonise hard to abate sectors, including heavy industry,” said FFI chief executive Julie Shuttleworth.
“The research being undertaken by Sparc Hydrogen is important for FFI’s growing technology portfolio as we continue to develop technologies to lower emissions globally. We are excited to enter into this relationship and to support this critical research into green hydrogen,” Ms Shuttleworth said.
Expanding capabilities
While dipping its toe in the technology, Fortescue last year said it would build a $1 billion electrolyser factory in Gladstone in Central Queensland, with the project expected to break ground this month.
Fortescue chairman Andrew Forrest has described the development of the electrolyser factory as critical if Australia is to fully capitalise on demand for hydrogen.
China is the world’s largest producer of electrolysers, stoking concern that Australia is falling behind.
Fortescue has moved aggressively to expand its hydrogen presence which is tipped to see substantial growth as the world seeks to limit catastrophic global warming.
Wood Mackenzie last year said Australia is at the head of a pack of nations chasing a huge opportunity in the export of hydrogen. Demand may climb as much as sixfold by 2050, the company said.
Global demand for low-carbon hydrogen could reach as high as 530 million tonnes by mid-century under the 1.5 degree warming scenario, with almost 150 million tonnes of that involving cargoes shipped by tanker, the firm said.
Many expect hydrogen to be the main source of fuel in heavy industrial vehicles, supplementing batteries that will be the dominant source of power for passenger cars.
That theory has been built on the notion that a battery capable of powering a haul truck full of iron ore would be problematically large and heavy.
Fortescue has also increased investment in batteries, agreeing last week to a $311 million deal to acquire a battery and engineering company with historic links to the famous Williams Formula One motorsport team, which the miner said will help it build batteries for trucks and trains.