March 31, 2022 • Paul Rodden • Season: 2022 • Episode: 103
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In episode 103, Another huge announcement out of Europe as they look to Fortescue, and Australia and hydrogen to further replace Europe's reliance on Russian gas. I'll dive into it today on the hydrogen podcast.
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Another huge announcement out of Europe as they look to Fortescue, and Australia and hydrogen to further replace Europe's reliance on Russian gas. I'll dive into it today on the hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
Starting out in a press release from E.ON on March 29, Fortescue Future Industries and E.ON partner on journey to become Europe's largest green renewable hydrogen supplier and distributor Australian renewable green energy company Fortescue future industries FFI and E.ON one of Europe's largest operators of energy networks and energy infrastructure, and a provider of innovative customer solutions for 50 million customers partner on a journey to deliver up to 5 million tonnes per year of green renewable hydrogen to Europe by 2030. Now today, both parties signed a memorandum of understanding to execute on this ambition, with binding elements between the parties to deliver on this mission. Each side has committed to a research and study partnership with further detailed documentation and steps required related to supply.
Now this historic partnership marks E.ON's and FFI is broader ambition to lead the decarbonisation of Europe and to strengthen security of green energy supply at a time when Europe needs to reduce its energy dependence on hydrocarbons from Russia as quickly as possible. 5 million tons per year of renewable green hydrogen is equal to approximately 1/3 of the calorific energy Germany imports from Russia. The agreement was signed in Berlin by Dr. Andrew Forrest, Chairman of FFI and Patrick Lammers, COO of E.ON in the presence of Michael Kellner, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action and Australia’s Ambassador to Germany Philip Green. The two companies are together in the spirit of the Australia Germany hydrogen accord signed in June 2021 At the g7 summit. Both companies will work together in collaboration with their governments regarding how to achieve supply as fast as possible. Both aim to ramp up quickly to 5 million tonnes per year of green hydrogen by 2030. This will help to decarbonize 1000s of medium sized enterprises all over Germany and the Netherlands as well as other European cities and communities to which E.ON distributes energy.
In a quote from Dr. Andrew Forrest chairman and founder of FFI the announcement of this historic partnership today aims to diversify the future energy security in Europe, green energy will reduce hydrocarbon consumptions dramatically in Germany, and quickly helped substitute Russian energy supply while creating a massive new employment intensity industry in Australia. This is a cohesive and urgently needed part of the green industrial revolution underway here in Europe, German Minister for Economic Affairs and climate action, Robert Habeck said the race for large scale production and transportation of green hydrogen has taken off. The agreement between E.ON and FFI is a major step forward and puts them in a pole position for the delivery of green hydrogen to German industry. I congratulate the two companies and I strongly welcome their contribution to a future without hydrocarbons. We will keep fostering initiatives like this one within the German Australia energy partnership. Now it is intended that such a large amount of renewable green hydrogen will be powered by Australia's immense renewable resources, as well as FFI's, other plan global projects, and will be distributed by E.ON. The parties have also agreed to work together to analyze what solutions could look like to solve infrastructure issues, and to build a secure value chain. In a quote from Julie Shuttleworth, CEO of FFI.
We cannot keep gambling our energy security and the planet's future on hydrocarbons. Green hydrogen is a practical implementable solution to decarbonize and lower emissions. And in a quote from Elizabeth Gaines, the CEO of Fortescue Metals Group, which is the parent company of FFI, we are rapidly establishing the building blocks across Australia and globally that will allow us to develop and fully integrate our world leading green technologies manufacturing capability and green energy generation and distribution. From the beginning of FFI, our philosophy was to drive performance across the entire new renewable green hydrogen value chain. Today's important announcement in Europe is not just signaling to the global marketplace that now is the time to make green hydrogen. But it is also an exciting step forward and FFI'S journey to become one of the world's largest green energy producers. And in a quote from Leo Birnbaum, CEO of E.ON, E.ON is decisively driving forward the green energy transition in Europe and is fully committed to sustainability and climate protection. Renewable green hydrogen is a key element to achieving this task, while at the same time contributing to a secure and affordable future energy supply. Our partnership with FFI is an important milestone on this path. Two major international companies are joining forces to build a quote hydrogen bridge from Australia to Germany and the Netherlands based on shared values, and the joint capability of realizing the scale of such a project to together make the decarbonisation possible for many, which is an encouraging message, especially in these days.
And lastly, in a quote from Patrick Lammers, the CEO of E.ON, we are foreseeing a rapidly increasing demand for renewable green hydrogen, especially in our industrial "Mittelstand” client base in the regions we serve. Therefore, we look forward to unlocking the potential of this totally green, climate friendly energy source for our customers, and are pleased to work towards building a secure value chain with a strong partner like FFI. Together, our ambition is to quickly diversify the energy system in Germany and the Netherlands. Okay, so news like this really doesn't get much bigger. Last week, I talked about the US stepping up to help Europe with their energy needs. But now in this case, we have two private industries stepping up to do the same thing. Now, on the surface, this announcement looks very targeted, specifying Germany and the Netherlands. What's important to note is that Germany is the largest country by population in Europe, to rely on Russian oil and gas, in that 49% of their gas comes from Russia, putting them the seventh on the list behind North Macedonia, Bosnia and Herzegovina, Moldova, Finland, and Latvia and Bulgaria. So without this energy incoming from Russia, Germany really is at a critical point for finding ways to meet their energy needs. And it sure sounds like Fortescue future industries, is there to answer the call.
And so the questions that come up are things like, can they really produce 5 million tonnes per year of green hydrogen? And even if they can, how are they going to get it from Australia to Europe? Well, really, I think by 2030, a lot of that will already have been answered, especially right now that liquefied shipments are going from Australia, to Japan. And as a potentially even easier solution than that. There are green ammonia solutions that are being pursued by Canada and other countries to export hydrogen to Europe also. Now the founder of Fortescue, Andrew Forrest has come out saying that he expects this to be a $50 billion expenditure on Fortescue's end. And that $50 billion number is quite a bit of a jump from $125 million joint venture fund that they raised earlier. And so with that being said, My biggest concern about this, are the economic surrounding this, and so really, what I would like to see from a hydrogen market standpoint, are other companies jumping into this opportunity. Now, Australia has long been at the forefront of green hydrogen development. And they are well suited as a nation to lead the charge for bringing green hydrogen to Europe.
But it would also be great to see other companies like Infinite Blue Energy, which just announced the first large scale green hydrogen plant in northern West Australia. Now that plant is slated for heavy transportation, but I'm assuming that some of that hydrogen could be used in Europe. And to that point, there are other energy companies outside of Australia that have been in talks with Germany and other European nations for supplying hydrogen. Many of those companies reside in the Middle East. And lastly, why am I talking about green hydrogen in this situation, versus blue? Well, because of the Russian engagement with Ukraine right now, natural gas prices have skyrocketed around the world. And so if you're looking to an energy alternative outside of methane or natural gas in Europe, well, really electrolysis derived hydrogen is your best solution.
And really, the secondary issue that pops up from all of this is who is going to crack the code on scaling up electrolyzer production. And really just to fall back to a point that I made earlier, what I would really love to see are other companies involved in hydrogen. Getting into this type of agreement to help Europe through this energy crisis. Fortescue, and E.ON have stepped up for this. And I would love to see other companies make the same commitment.
Alright, that's it for me, everyone. Now, if you have a second, I would really appreciate it. If you could leave a good review on whatever platform you listen to Apple podcasts, Spotify, Google, whatever it is, that would be a tremendous help to the show. And as always, if you have any questions, comments or concerns about today's episode, come and visit me at my website at thehydrogenpodcast.com. Or you can always email me at firstname.lastname@example.org. I would really love to hear from you. And as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more, I'd appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.