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Speech to Reuters Global Energy Transition Conference

Speech 15 June 2022
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NY Reuters speech – INTRO

Good afternoon, ladies and gentlemen.

It is an honour to be here today at the Reuters Global Energy Transition conference.

We are at war, ladies and gentlemen.

Today is Day 110 of Russia’s attack on Ukraine. An attack that threatens every democracy on this planet, not just Ukraine’s.

This week, Putin publically compared himself to the Tsar, Peter the Great.

Peter the Great, like Putin, was a violent despot, famously idolised by Stalin.

But otherwise, the comparison is not particularly apt.

Peter the Great is credited by some for Westernising his country, establishing Russia as a major player in Europe and building a capital at St Petersburg.

In contrast, Putin will be remembered for murdering innocent women and children, triggering a devastating humanitarian famine globally and condemning his country to economic obscurity and global isolation.

The world is also facing a cost-of-living crisis – record inflation and unaffordable fuel, once again fuelled by Russia’s invasion of Ukraine.

Compounding this problem is that many countries remain reliant on Russian gas, Russian coal and Russian oil.

There is a solution that will bring every country on the planet energy sovereignty and energy independence – and that solution is green electricity and green hydrogen.

Green electrons and green molecules.

But we must act now, to make this solution a reality by 2025, when emissions must peak and start to fall.

THE ROLE OF THE UNITED STATES

That is why I commend the United States’ invocation, this week, of the Defense Production Act.

This action will supercharge US production of clean energy technologies – from solar panel components to transformers to the electrolysers that make green hydrogen.

The announcement signifies a new era for the United States.

One in which green jobs – in engineering, construction, chemistry, IT, in every field we already have – will flourish.

One in which the US becomes a hotspot for thousands of new, green manufacturing jobs.

Those jobs are coming to the US this year – and my company, Fortescue Future Industries or FFI, is bringing them.

World-leading decarbonisation technology for hard-to-abate sectors is coming to North America – and FFI is delivering it.

I always say – don’t trust a man by his words but by his actions.

REPURPOSING COAL-FIRED POWER STATIONS

Repurposing existing, massive-scale fossil fuel infrastructure just makes economic sense, and America has many of these projects to take advantage of.

Ladies and gentlemen, FFI is already doing it.

In Australia, we are working with Australia’s biggest polluter, AGL Energy, to turn its coal-fired power stations into thriving green hydrogen production centres.

In the United States, FFI is exploring the feasibility of converting Washington’s Centralia coal mine, which closed in 2006, into a green hydrogen hub.

Our proposed plant will not only accelerate US decarbonisation – but will also support the development of a Pacific Northwest green hydrogen hub, creating hundreds of new well-supported and long-term jobs for locals.

Just in the nick of time – with the nearby coal-fired Centralia power plant slated for closure in 2025.

THE POWER OF GREEN HYDROGEN & IT’S ONLY GETTING CHEAPER

Green hydrogen now lies at the core of the world’s fight against global warming.

It is a zero-carbon, zero-methane fuel – and it is forecast that it will supply up to 25 per cent of the world’s energy needs by 2050.

Growth in this industry is going to happen, ladies and gentlemen, regardless of what any single country does – but countries that set up good investment environments right now will benefit the most from that growth.

Those that sit back and do nothing will see other jurisdictions (such as China) pick up the benefits.

Why?

Because green hydrogen is only going to get cheaper and more abundant, whereas fossil fuels and their derivatives, such as blue hydrogen, will only become more expensive and less affordable.

The cost of blue hydrogen – which is made from natural gas – is now 36 per cent higher than it was a year ago in the UK, according to a new report by the Institute for Energy Economics and Financial Analysis.

Green hydrogen will undercut blue hydrogen in cost by 2030 latest – and far sooner, in countries with cheap renewables and pro-active governments, according to a report by Bloomberg NEF last year.

And let’s not forget that blue hydrogen isn’t even clean.

It is simply hydrogen that has been separated from a fossil fuel feedstock, with the glib promise that the leftover carbon will be safely collected up and stored underground forever more.

Ladies and gentlemen, that is an empty promise.

The true capture rate of most carbon capture and storage projects is typically just half of what is claimed.

Industry will tell you they’re aiming for a carbon capture rate of 95 per cent.

The data is scarce and challenging to verify but real capture rates are reportedly as low as 53 per cent, for example, at Boundary Dam coal plant in Saskatchewan and 70 per cent at Petra Nova, a coal plant in Texas.

GREENWASHING

Ladies and gentlemen, the USA still has a long way to go to reach its climate goals.

Yes, it is true that the United States’ private sector has invested over US$100 billion in electric vehicles and battery technologies in the US.

Offshore wind has taken off and your domestic solar manufacturing capacity is set to triple by 2024, enabling 22.5 gigawatts of renewable electricity capacity.

However, there is more to do and this is why I say to the United States, with the greatest respect: don’t fall for the oil and gas industry’s greenwashing.

Act now to prevent fossil fuel companies from promoting their increasingly stranded, dirty, uneconomical assets as “clean” or “green.”

Greenwashing is far more than industry spin or feel-good PR – it has the power to delay climate action by decades.

That is why I whole-heartedly commend the US Securities and Exchange Commission for investigating companies with dubious ESG claims, and the German authorities for taking police action to hold companies to account just last week.

Business is the source of the problem – and business must take responsibility for developing real decarbonisation solutions.

WHAT IS FFI DOING?

Last year, FFI was honoured to be part of the First Mover’s Coalition at COP26 with President Biden, to decarbonise heavy industry and long-distance transport.

Later this week we will have more to say on our world-leading work to decarbonise heavy industry.

A few months ago, we also announced a major partnership with E.ON, one of Europe’s largest operators of energy networks and energy infrastructure, with over 50 million customer to replace Russian fossil fuels with zero carbon green energy from Australia

This partnership will make us Europe’s largest green renewable hydrogen supplier and distributor, through the delivery of up to 5 million tonnes per annum of green hydrogen by 2030.

5 million tonnes per annum, ladies and gentlemen is equivalent to roughly one third of the calorific energy Germany imports from Russia.

We are working tirelessly with the EU and the G7 to enable Europe to shrug off its crippling dependence on Russian fossil fuels – and to step forwards into a future of energy sovereignty and independence.

We stand ready to ship our sunshine from Australia all over the world, in the form of green hydrogen and its many derivatives, from green ammonia to green fertiliser and green metals.

GREEN HYDROGEN STANDARD

The first step in the journey is to – as Secretary John Kerry stated recently at G7 – develop a common definition of what “green” hydrogen is.

To halt global warming and avoid more than 1.5 degrees warming, we have to get this right first time. We can’t invest in fake solutions that will simply make climate change worse.

We must focus on real decarbonisation solutions with stringent definitions – hydrogen that will wipe the emissions slate to zero.

To do that we need the Green Hydrogen Standard that was launched in May in Barcelona by the Green Hydrogen Organisation.

I call on the US Government and its businesses to join that standard urgently.

I also call on the US Senate to come to extend renewable tax credits and pass a US$3 per kilogram direct pay tax credit for green hydrogen.

This would change the game for green hydrogen.

It would, in one swoop, make the USA the most attractive country in the world to produce green hydrogen.

AUSTRALIA & CLIMATE CHANGE

Ladies and gentlemen, Australia has been late to global effort to take action on climate change, or as new Prime Minister Albanese said recently (in the understatement of the year), we have been “in the naughty corner.”

The truth, of course, is that until the Government changed last month, the Australian government had refused to take responsibility for its climate impact, as one of the highest emitters, per capita.

We were climate Neanderthals who belonged in Prehistory.

But we are finally here, in the modern world.

Australia is going to be a green energy superpower and we are finally going to take responsibility for our emissions, while seizing the economic opportunities that decarbonisation presents.

According to the Carnegie Endowment, a US think tank, Russian fossil fuel export to Europe has been earning Russia more than US$1 billion a day.

A simple solution lies in our hands.

We must work together to collapse Russia’s fossil fuel revenues.

We must switch at speed and scale to green electrons and green molecules.

And we must do this now – not in 2025 and not after approving more toxic oil and gas projects that will prolong the climate crisis for decades to come.

Ladies and gentlemen, time will run out for our planet – before fossil fuels do.

Thank you.