Fortescue keeps faith in its green hydrogen unicorn hunt

“If I’m a world-class juggler today, now you want me to jump high jump. So, how do I actually go and learn how to jump high jump, and do that as well as I can juggle? Because investors expect me to deliver the same sorts of returns, no matter what I do in my business.”

BHP gave us a neat example of this last week, when it said electric vehicle manufacturers were not yet willing to pay a “green premium” for more sustainably mined Australian nickel at a time when markets are flooded with cheaper, but dirtier, Indonesian nickel.

A big part of the problem, Coleman says, is there are few examples of companies that have actually managed to go green to enhance – or even maintain – their returns, with some companies that have gone down this track now retreating.

One company that is clearly not retreating is Fortescue. And not surprisingly, Mark Hutchinson, the CEO of Fortescue Energy, and the man in charge of delivering chairman Andrew Forrest’s green hydrogen dream, takes a politely different view of the transition. .

While Fortescue chases an aggressive target of decarbonising its existing operations by 2030, Hutchinson says too many businesses are simply kicking the can down the road.

“If a company has a 2040 or 2050 target, they are saying, ‘it’s not my problem’. I think we’ve got a long way to go.”

While Fortescue’s decarbonisation push is in train, Hutchinson doesn’t shy away from the pioneering role that the company must play in green hydrogen.

“There is no price for green hydrogen, there’s no market, there’s no index at the moment – but there will be,” he told the Summit.

Hutchinson is just weeks away from getting the Fortescue board to sign off on Fortescue Energy’s first five major projects in the US, Norway, Brazil, Kenya and in Australia, where it is building an electrolyser factory in Queensland at Gibson Island.

Should those projects get a final investment decision from the Fortescue board – and Hutchinson says he’s confident they will – then he will be able to show that buyers do exist, regardless of whether they’ve got horns or not.

“I believe that the buyers are there [and] you’ll see over the next few weeks as we come out with some of our deals that they’re there.”

The first morning of the Summit was a depressing reminder of how slowly the transition is moving locally, and much of it appears to stem from the struggle participants have in finding the right sorts of returns in this energy transition.

In addition to the business community struggling to weigh up how the transition will hit their returns, Daniel Westerman, the CEO of the Australian Energy Market Operator, says investors in new renewable generation can’t get the sorts of returns required to get projects over the line.

And landholders clearly can’t get the sort of returns they need – in the form of compensation and other concessions – to allow the 10,000 kilometres of transmission to deliver that renewable energy to the grid.

Anna Collyer, the Australian Energy Market Commission chairwoman, says it’s important to recognise Australia doesn’t have cookie-cutter models to follow through this energy transition – we are unique and in some respects – such as rooftop solar – we are way in front of the rest of the world.

But the danger is that we get stuck in low gear, when we need to do the opposite.