Dr Andrew Forrest AO delivers speech at Reuters IMPACT conference

Good morning, good afternoon, good evening.

My name is Andrew Forrest.

In 1973, Normal Mailer coined the term “factoid” in his biography about Marilyn Monroe.

A factoid is something that looks like a fact, could be a fact, but in fact is not a fact. It’s an unreliable piece of information that has been repeated so often that it has the ring of truth.

For example, some people believe the Great Wall of China can be seen from the moon.

But that’s a factoid – for that to be true, your eyesight would need to be 17,000 times better than 20/20.

Today, I want to talk about another factoid that you may have heard about.

Net zero.

It’s a cute phrase, that trips off the tongue.

It’s touted as the world’s solution to climate change.

But it’s a lie.

Net zero isn’t a real solution.

Net zero is a carte blanche to continue using fossil fuels – but offset the emissions, by pretending we can capture all of the carbon dioxide we emit and burying it underground, or by planting the whole Simpson desert in Australia with trees. It’s not going to happen.

It’s thanks to “net zero” that we are now inundated with charming oxymorons such as “clean coal” and “blue hydrogen.”

I ask you all to throw out the term “net zero” and commit to “absolute zero.”

Absolute zero requires three things.

Firstly, it requires 100%, green, renewable, zero-emissions energy – wind, solar, tidal, hydro and geothermal. There’s no carbon in that supply chain.

Secondly, it requires a new, zero-emissions energy carrier – one that can replace the fuels used by the world’s dirtiest sectors – the ones that we can’t currently electrify. That energy carrier is green hydrogen and green ammonia.

And lastly, it requires that all of us stand up and fight against the factoids – the shoddy science masquerading as “fact” that says we can keep using fossil fuels and everything will be just fine.

With just a month to go before COP26, the most important meeting of the decade, perhaps in our lifetimes, it is time to end the era of greenwashing and – eyes wide open – establish a new era of real climate protection, one that is founded on transparency, founded on science and founded on reality.

So today, I want to talk about the forgotten sectors.

These are the dirtiest, ugliest, least glamorous reaches of industry – iron, steel, fertiliser, cement, aluminium, heating, air travel and shipping. You recognise all of them – they are completely essential to the continuation of society, yet an enormous and growing source of emissions and – currently undecarbonisable.

I should know. My iron ore company in Australia, Fortescue, is the fourth largest iron ore company in the world. Every year, our operations produce two million tonnes of carbon and, if you add in the shipping to our customers, our footprint more than doubles. This is more than the emissions of Iceland yet a fraction of what my colleagues in the iron ore industry produce. Together, iron ore and all the hard-to-decarbonise sectors add up to almost 25 per cent of global emissions.

But with you, I plan to change that.

We are creating a global, green hydrogen industry, and have established a multi-billion dollar initiative to drive it called FFI.

Eleven years ago, we started working on green hydrogen. Five years ago, we started acquiring early technologies to transport and store it. And when COVID hit, we used the opportunity to travel the world to test the hypothesis that green energy is so abundant it can power the world for all time.

Green hydrogen, to be clear, is hydrogen made from water, using only renewable electricity.

It is the “Swiss army knife” of energy because it is versatile. It can reach the most challenging industry sectors, from heavy manufacturing to long-distance trucking, cargo ships and aircraft.

Green hydrogen is not a speculative technology – it is already being produced, at pilot scale, in many parts of the world where renewable energy is cheap and abundant. Some people are calling it “the new oil” – but one that doesn’t end our environment.

Hyundai – like us, are a huge, and heavy-emitting company – and totally reflect our own belief and conviction, that green hydrogen can be for “everybody, everything and everywhere.” I was delighted to see that they will offer fuel cells in all commercial vehicles by 2028. Because we need action now. 2050 just kicks the can down the road.

But what’s really exciting about green hydrogen is that it promises to redraw the map of global energy trade and wealth. Why? Because you can make it anywhere in the world. Some of the poorest countries today are sitting on the biggest potential sources of green hydrogen. Green hydrogen and sunshine will also throw a lifeline to the Middle East, to diversify their economies away from oil and gas.

These are not visions, they are getting built.

Once FFI has approvals, it will start the development of what could become a portfolio of 150 different green energy and green hydrogen projects all over the world. Fortescue has also set itself a world-leading target for heavy emitters of zero emissions by 2030.

Every heavy emitting company can reduce its operating costs by going green – not just Fortescue.

Our aim is to produce 15 million tonnes of green hydrogen every year by 2030, increasing to 50 million tonnes per year thereafter – a scale of zero-emissions, zero-pollution energy production equal to the very largest oil and gas companies that exist today.

We’re securing resources all over the world, and at home.

In Tasmania, we are planning to build a 250MW green hydrogen facility at Bell Bay, which will be the largest in the world when it comes online after 2023. These big hydrogen projects are great news for local economies and should be welcomed everywhere. In Tasmania alone, our Bell Bay project could add $18 billion Australian dollars to Tasmania’s economy and thousands of new employment opportunities. Green hydrogen has the power to help everyone, everywhere.

We also have a team of scientists who have successfully figured out how to use renewable energy to convert iron ore to green iron at low temperatures… without the use of coal – a stepping stone to creating an entirely new green steel industry in Australia.

Last week, I visited another of our teams – a team of women and men who were given a target of only 130 days to build the world’s first hydrogen fuel cell haul truck and drill rig… and a green ammonia-powered train… and ship engine.

130 days to start the next industrial revolution. And they did it.

When those huge engines started, I was shocked. Instead of what we all expected, I was greeted with silence… the sound of the future. And instead of the expected smell of exhaust and sight of smoke, there was only a little steam – pure, beautiful water. The vision of the future.

Why was I only the third person in the world – the other two were the engineers who built it – to have driven a hydrogen fuel cell haul truck?

And why did this 130 day breakthrough not happen decades earlier?

The answer is that there were no societal settings, no government encouragement – complete silence on carbon emissions and the looming disasters ahead of us.

Green Hydrogen is the solution we need to get to Absolute Zero.

But right now, of the 60 million tonnes of hydrogen produced every year, 96% is still made from fossil fuels.

If you just let these emissions drift into the air, it’s called “grey” hydrogen. If you try to capture the CO2 and store it underground, industry calls it “blue” or “clean” hydrogen.

But blue hydrogen is not “clean” and, tragically, most governments – without a scintilla of science – are throwing tens of billions of dollars in subsidies at it.

The truth is that the fossil fuel industry has lobbied hard and you will see a spectacular example of this at COP26, to get taxpayers to fund their attempt at a transition to “clean” energy – on their timetable. But that’s a highway to climate disaster.

Let me explain why blue hydrogen will never be “low-carbon.”

One reason is methane – a greenhouse gas that is 86 times worse than CO2 across its 20-year lifespan. The blue hydrogen supply chain leaks methane every step of the way.

These emissions are called “fugitive” emissions because they cannot be prevented. They’re also largely unmeasured, but there is strong evidence that the world is severely underestimating them. For example, a highly credible study in 2018, published by 160 scientists in the journal Science, found that the US oil and gas industry was emitting 60 per cent more methane than their own government estimated.

Then there is the flaring of natural gas, which is also integral to blue hydrogen supply chains. Every year, the world flares an amount of gas equivalent to the entire natural gas demand of Africa. We estimate that almost 150 times Fortescue’s annual CO2 emissions are emitted by the fossil fuel industry as a waste product via flaring alone – before the fossil fuel can even be put to economically productive use.

It gets worse. Supporters of blue hydrogen say – “hey, don’t worry about our CO2 emissions, we’ll use carbon capture and storage, CCS, to bury them underground.” But get this, currently, there are only roughly 20 pilot CCS plants in existence, and they capture just 0.4% of the CO2 emitted globally by power stations and industrial processes. 0.4%. What you don’t hear from industry is that carbon capture and storage, despite having received billions of subsidies for decades, remains an unproven failure, far from commercial viability. Yet still, it gets trotted out by the fossil fuel sector.

Some forward-looking countries have seen through the greenwash and are firmly committed to green hydrogen – Chile, France, New Zealand, Portugal and Spain.

But most countries, including my own, are dithering – unsure whether to back green hydrogen or blindly commit to yet more fossil fuels, this time disguised as blue hydrogen. Which at least until the electorate wakes up, can be passed off as climate change action, by some politicians, who either haven’t done their homework or are confident that the science won’t reach their voters before the ballot box does.

How do we get out of this mess, and ensure we reach Absolute Zero in time to avoid dangerous climate change?

There are four steps out.

Firstly, we need legislation in every country that sets a target of Absolute Zero by 2050 latest. At the last count, over 60 per cent of countries have committed to “net zero” by 2050. It’s time for the heel draggers and the hesitant to come out of the shadows. We also need legislation that encourages the establishment of a global green hydrogen market, de-risks investments and supports R&D. Governments can put in place legislation, empowered by the foresight of their citizens, or they can be forced, increasingly, through climate litigation.

Secondly, we need a global hydrogen accreditation system – one that is far less forgiving than the current industry standard, which classifies hydrogen as “low-carbon” even if it emits 4 kilogram of CO2 per kilogram of hydrogen. It’s a laughably low bar, and doesn’t even factor in fugitive methane emissions. Our accreditation system, which we hope Australia will be launching soon, will be far more stringent. If your hydrogen carbon intensity is above a certain threshold, say 1:1, then the country or company buying it will know. And all hydrogen will come with a Certificate of Origin, so you will know if it was produced using green, zero-carbon-in-the-supply-chain, renewable energy – or fossil fuel.

Thirdly, we need legislation that requires full disclosure by industry of its methane emissions. Cutting methane emissions is the best opportunity we have to slow the rate of global warming – but companies aren’t even required to measure their methane emissions, let alone report or reduce them.

Lastly, we must ban all forms of carbon offsets, including carbon capture and storage – or at least disallow them from becoming industry’s “golden ticket” to Net Zero. Of the 2,000 largest publicly traded companies by sales, 92 per cent of those that have committed to net zero are relying on offsets to get there – paying for emissions reductions elsewhere, rather than cutting their own.

I know this to be true because my own companies do it. But we certainly do not consider offsets our “golden ticket” to absolute zero in the long-term – that we will achieve through green hydrogen and renewable energy alone, and we are throwing our entire company at its availability to you. To Hyundai. And as they say, to “everyone, everything and everywhere.”

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Eleanor Roosevelt once wrote, “We cannot any longer take an old approach to world problems. They aren’t the same problems. It isn’t the same world.” She was a fiercely intelligent and a truly visionary pioneer and probably would have been disappointed at the lack of women on this panel today. Her words from 1961 are just as relevant today.

If you take home only two messages from me today, it is this: if it’s not green, it’s not clean. Everything else is a smokescreen, a factoid, an expensive distraction. Don’t fall for it.

Secondly, if we come together on this at COP26, we have a real chance to fix the problem of climate change for good. Let’s come together.

Thank you.