Australian miner Fortescue has laid out a plan to eliminate the use of fossil fuels across its iron ore operations by 2030 — without relying on controversial offsets.
In their “net zero” roadmaps, mining groups and other corporates tend to rely heavily on carbon credits, whereby they counter their own emissions by funding projects that protect and restore forests, for example. But studies show that the benefits of these schemes are often vastly exaggerated and they do little to address climate change.
Fortescue has ditched that playbook and says it will reach “real zero” by the end of this decade.
To get there, the company will:
- Get to 100% renewable electricity supply by installing another 2-3 GW of solar, wind and battery storage, along with a dedicated network of power lines.
- Convert its fleet of mining trucks, drill rigs and excavators to run on batteries and green hydrogen.
- Convert its iron ore trains to run on batteries, gravity and green ammonia.
The decarbonisation programme will cost $6.2 billion, but will pay itself off by 2034, Fortescue says. That’s because the miner will no longer need to purchase 700 million litres of diesel and 15 million gigajoules of gas each year, plus carbon offset certificates. Based on current prices, Fortescue will trim its operational costs by $818 million a year from 2030.
The company adds that its income statement will no longer be heavily influenced by fossil fuel price volatility, and it expects strong demand for its “carbon free iron ore product”.
It has already stopped buying carbon credits, and will redirect those funds towards the decarbonisation strategy.
In a statement, Fortescue chairman Andrew Forrest said the programme will “protect our cost base, enhance our margins and set an example that a post fossil fuel era is good commercial, common sense.”
CEO Dino Otranto said: “We are the only heavy emitter in the world to stop purchasing voluntary offsets. We will focus our efforts on eliminating the million litres of diesel we use per year, rather than offsetting them.”
“For years we have been saying that voluntary offsets don’t work — they just pass the buck,” added Fortescue Energy CEO Mark Hutchinson.