The US Inflation Reduction Act is ignored “at our peril,” according to the Australian billionaire with an ambitious plan to make his iron ore company a green hydrogen behemoth.
“We have to really take advantage of the IRA and Australian policymakers have really got to take notice of the IRA,” Fortescue Metals Group Ltd. Chairman Andrew Forrest said Tuesday at the Australian Financial Review Business Summit 2023. “To ignore it is at our peril.”
Andrew Forrest, chairman of Fortescue Metals Group Ltd., speaks during the AFR Business Summit in Sydney, Australia, on Tuesday, March 7, 2023. The summit runs through March 8. Photographer: Brent Lewin/Bloomberg
The Perth-based iron-ore miner, the fourth-largest producer, expects to be “very profitable” producing hydrogen using renewable energy such as solar and wind before 2030 and is targeting output of 15 million tons by then, requiring the construction of hundreds of gigawatts of new renewable generation at a possible cost of hundreds of billions of dollars. While the company has signed numerous non-binding offtake agreements, it is yet to announce any multi-gigawatt projects or raise any capital to fund its plans.
Read more: IRA Could Scale Up Green Hydrogen Production
Under the IRA, green hydrogen production would get as much as $3 a kilogram in tax credits, and costs could become negative by 2029, according to BloombergNEF. That’s hard to ignore when deciding where to invest, Forrest said.
“If I have a project here in Australia that’s going to cost me $2 billion, there it’s going to cost $1 billion because they’re going to fund half of it,” he said. “And then they’re going to make sure that they cut the first $3 of cost of producing green hydrogen.”
Oil Steadies Near Five-Week High Ahead of Fed Chair Testimony