**Green Hydrogen’s Future Hinges on Competitive Pricing, Says Fortescue Energy CEO**
In Davos, Switzerland, Mark Hutchinson, CEO of Fortescue Energy, emphasized that the transition from fossil fuels to green hydrogen relies heavily on creating demand through competitive pricing. He noted that consumers are reluctant to pay “green premiums.” Green hydrogen is produced by using renewable electricity to split water into hydrogen and oxygen, serving as a power source or a means to create carbon-free ammonia, which is essential for agricultural fertilizers.
Hutchinson highlighted the high costs associated with electrolyzers, which are necessary for hydrogen production, and expressed disappointment that government subsidies to alleviate these costs have not materialized as anticipated. He remarked, “The green hydrogen and ammonia sector is not where we thought it would be,” during the World Economic Forum’s annual meeting. He expressed hope that demand would increase in the coming years as prices decrease, stating, “If you’re waiting for someone to pay you extra because it’s green, forget it… the economics have to work.”
Fortescue Energy, the green energy division of the Australian iron ore company Fortescue, previously announced in July that it might not achieve its goal of producing 15 million metric tons of green hydrogen by 2030. The return of Donald Trump to the White House has raised concerns about a potential backlash against environmentally focused business strategies, as he declared an energy emergency and rolled back green policies shortly after taking office. Hutchinson acknowledged that the push for green energy might take a backseat during Trump’s presidency, but stressed the importance of framing the discussion around economic viability rather than solely environmental benefits.
Despite concerns about demand, Fortescue Energy has significantly increased its focus on “green iron,” which is produced by reducing iron ore with hydrogen gas and then converted into steel using electric arc furnaces. The steel industry, a crucial component of infrastructure and the transition to net-zero energy, currently accounts for approximately 8% of global carbon emissions. Hutchinson also mentioned that final investment approvals for green hydrogen projects in Norway and Brazil, initially expected in 2023, are still pending as Fortescue Energy seeks to attract more investors.
