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The Economic Choices of an Environmental Rationalist

14 October 2021

Ernest Hemingway once wrote that change happens in two ways – gradually, then suddenly.

You only had to pick up a newspaper this week, to know that fossil fuel’s “Berlin Wall” had finally collapsed.

The change is now sudden, the only question is will Australia be part of it in time to be competitive?

Major new green hydrogen projects, politicians sensing the massive change in the wind, old media becoming new – feels like gale force to me, with those winds of change, driven by you.

Only this morning, the Reserve Bank’s Deputy Governor said no matter the opinions of critics, the move to Net Zero is going to happen – and if they don’t, the risk to local businesses will only continue to grow.

All of us now reading the signs, and the science, know this.

On Sunday, I announced the AU$1 billion build of the world’s largest green hydrogen electrolyser manufacturing plant – which will double the world’s supply of electrolysers.

Not in India, not in China, not in Europe – but in Gladstone, Queensland, Australia.

The starter gun has been fired on the journey of bringing manufacturing at home roaring back, particularly to regional Australia.

Up to this point, practically our green energy – think wind turbines and solar panels – have, like our diesel and oil, been imported.

But I want countries, including, most of all, ours, to take control of their own economic and energy sovereignty.

On top of that great State of Queensland, where Fortescue Future Industries, FFI, is making our first major manufacturing investment, New South Wales is also to receive the world’s first green hydrogen energy import and export terminal, as well as a “dual fuel” power station, which will transition from a blend of green hydrogen and LNG to 100% green hydrogen, as GH2 supply increases.

All from, I hope, after Premier Perrottet’s announcement yesterday, from right here at home, in New South Wales.

Not from the Middle East. Not imported oil and diesel. Not even pollution-ridden coal – but from crystal clean green hydrogen, made right here.

And let’s clear that up. We hear a lot about so-called “clean hydrogen.”

It’s a soundbyte covering the fact it’s from fossil fuel. It has carbon all through its supply chain.

Sure, it’s clean once it’s hydrogen, but to get it there – it’s dirty.

Very dirty, with heaps of carbon dioxide emitted in the process.

But there is that other dirty little secret – the gas which is invisible to the naked eye, but at least 80 times more dangerous as a global warming agent than carbon dioxide.

Methane – the basis of natural gas, which is not adequately nor independently measured, as fugitive emissions in fossil fuel.

This sector is better off simply burning the coal, the oil, the gas, than they are in hiding the emissions through turning it into blue-grey hydrogen, and having our otherwise astute Energy Minister, Angus Taylor, misled into selling it as clean.

Think clean coal. Think clean hydrogen. Think cancer-free tobacco. It all adds up to the same thing.

Misleading soundbytes, put out by industries wishing to continue a duplicitous social licence to operate.

Australia has thousands of times more renewable energy than fossil fuel has reserves.

So let’s keep fossil fuel going, but only as long as we need to – and let’s do everything we need to switch to a green future. Green electricity, green ammonia and green hydrogen can cover 100% of the world’s carbon emissions.

Let’s not hide the fact it isn’t clean. Let’s not cover our tracks – that we’re not encouraging green hydrogen fast enough. Let’s not put up walls between us and a green future.

Sydney may well be known as the Emerald City. But our plan is to join our Treasurer, Matt Kean, and the NSW State Government in making Sydney the world’s first major green city – the green, emerald city, through green hydrogen.

Once we’re firing our own green hydrogen-powered station into Sydney, our plan is to continue increasing green hydrogen production. This will be through a multi-billion dollar investment to create a million tonnes of – no longer imports – but green hydrogen exports, from that old fossil fuel and high-unemployment but going to new future, high-employment future at Port Kembla, in New South Wales.

Further, to help build this and keep the jobs in Australia, we’re planning additional manufacturing centres, beyond Gladstone, for green industry components in Parkes and also again in Port Kembla.

Australia can become a global green future manufacturing centre and energy superpower – if we follow what the State Government is doing in NSW with the Federal policy settings.

Only yesterday, New South Wales introduced the most far-reaching green hydrogen strategy in Australia, with a $3 billion investment to kickstart a globally competitive, local green hydrogen industry.

But don’t read just “investment” – read what really matters.

Jobs, jobs, and more jobs, equaling economic prosperity. As permanent in tenancy on Planet Earth as humans.

Again, provided we get our global warming settings right.

We will not go down with the fossil fuel sun – if we get those settings right.

The increasingly rare, fear-mongering politicians – thinking they might lose their careers by dragging yours down with them – are in sharp decline.

WA can get a bit of undeserved flak by you unruly mob over here in the East, but a poll out today from our good friends at The West, shows that 80% of West Australians support Net Zero emissions by 2050.

In a country where you can’t even get people to agree if vaccinations work, 80% is huge.

People, families, workers get it.

Even when interest rates turn around, I also see a future of cheaper home mortgages and greater affordability for a higher standard of living – because the world wants to invest in Australia.

I see affordability coming down, affordability to light up your homes and highways, power our factories and farms, schools, tech schools and universities, all over Australia, and I see it all being done while growing our economy – and while leaving your environment green and kind for your children and grandchildren.

This is a hard-edged economic choice, but it’s also social and environmental rationalism.

To the increasingly rare, hysterical politician fear-mongering against choice, pretending to represent us: it’s taken fifty years for fossil fuel to get the power bills down – and, mate, they’re still going up.

In five years, not fifty, you’ve seen the cost of green hydrogen halve – and mate, that cost is still going down.

Oh, and by the way – as the gas price goes up, green hydrogen is quickly becoming cheaper than blue-grey, fossil fuel hydrogen, even if it is dirty.

Because what you’re trying to do, as fossil fuel’s “best mate,” is cling to the foreign oil and gas companies playing cards with the future of every Australian. You increasingly rare and isolated politicians – you are denying Aussies the choice of a dirty fuel or a clean fuel, an expensive fuel vs a better fuel.

A fuel you can make right here in Australia – clean as the day is long and made by hardworking locals.

I’ve heard your rallying cries of deception – that Australia has sold out its economic and energy sovereignty – but it’s you, the laggard politician, standing on the hose, stopping us from getting our own economic and energy sovereignty back, with our own green hydrogen.

And, as you have probably worked out by now, that’s only going to happen if we produce the energy here, cheaper than anywhere else.

Those declining power bills are and will continue to be driven by hundreds of thousands of new jobs, using the exact skills we already have in the oil, gas and coal sectors.

And these sectors are declining because, at the end of the day, we are harnessing Australian wind and sunshine – both with a marginal cost of zero. And nothing’s less expensive than that.

Moving on from those increasingly lonely politicians, I see the workers’ careers from the fossil fuel sector to green as  permanent and your children’s futures even brighter – but unlike ours, cleaner – and I ask every Australian to dismiss those who are willfully blind to that certain future. There are none so blind as those who will not see.

Most of these massive job creation sites that I’ve mentioned will be in the bush – but let me talk to you about our first one in the city.

This week, I announced plans to convert one of Australia’s largest fossil fuel ammonia factories, in Brisbane, to run on green hydrogen.

It produces exactly the same molecules, just there’s no carbon – and much worse, methane – in its production.

This will be a breakthrough, creating Australia’s first green fertilisers and bringing down their cost for our farmers.

That ammonia will also provide renewable, pollution-free energy to the ships which pass the Port of Brisbane and Sydney, every hour.

Ladies and gentlemen, welcome to the future.

What you’re seeing here is economic and energy independent sovereignty – being brought back to Australia.

Our green hydrogen, our green ammonia and our green fertilisers will not be determined by what Saudi Arabia or Russia, in a good mood or not, which determines our quality of life, might cosily collude what the price might be.

We’re making our energy down the road, with the jobs next door – not overseas.

Please think of that when you see a hysterical “Chicken Little” politician on Karl and Ally’s Today Show – clucking about energy security, and doing absolutely nothing about it.

Which brings me to someone who doesn’t claim the sky is falling and whose eyes are firmly set on the future and seeing her career – and 400 of her colleagues’ jobs – prosper at that ammonia plant I spoke of in Brisbane.

Christie Rossi, Incitec Pivot’s young Facilities Supervisor.

On Monday, we walked together through the plant, and Christie explained that green hydrogen – as the new feed to this old fossil fuel plant – had not only given the entire workforce a lift in morale but removed the dark clouds of career uncertainty, which are faced by all of those in the fossil fuel sector.

From Christie Rossi to Rupert Murdoch, we can all read the writing on the wall.

Following on the heels of our major announcements this week, News Corp – for so long with a questionable attitude to climate change – launched an aggressive campaign for Net Zero emissions – “Mission Zero.”

There was a 16-page wrap around and frontpage splashes on all of its Australian mastheads – which featured the very same miners, like me, and farmers, like me, calling for a carbon neutral, renewable future.

I welcome all the great journalists from News Corp, and Rupert and Lachlan. We’re delighted and very relieved that you’ve joined the fray.

You’re arrival, ladies and gentlemen, is just in time – as the major battles of greenwashing, threats and deeply wrong and obviously unsubstantiated claims from the fossil fuel sector are still ahead of us. The ambushes are ahead and we are ready for them.

But News Corp wasn’t the only change in the wind direction this week – members of the National Party also called for a multi-billion dollar green investment in regional Australia, unthinkable only days ago.

I’m delighted that all States and Territories in Australia have a Net Zero target by 2050, but – Australia as a nation still does not, and that, for me, is an enormous concern.

Today, if I have only one message, it is that a national target of carbon neutrality is regional Australia’s jobs and economic opportunity – but only if Australians trust the good politicians not holding them back, and move now.

What’s so important about moving now?

Simply, that we rely on other countries to buy our goods and services and finance our huge projects on the basis that we meet our international standards. Our global customers and financiers have a choice, just like us – and they’ll make that choice in only two-weeks time, at COP26 in Glasgow.

If we miss declaring carbon neutrality at COP26, we’ll eventually be forced to declare it anyway, as the Reserve Bank observed today.

But, by then, our markets and financing will have dried up – and the stain that leaves, that we simply didn’t care, that we ignored our youth, we got the politicians we deserved – will count against us – forever.

That’s not fear-mongering.

We are watching international investors pulling the pin on Australian projects, now.

Can you blame them? It’s no conspiracy, mate. They’re just fund managers trying to make a dollar for their own punters.

They’ve made a rational economic judgement that those countries with a COP26 carbon neutral commitment are much better investments than those without it.

As an economic rationalist, I can see their logic.

But so does half the world’s investible capital, controlling $120 trillion dollars worth of assets. They have committed to not finance companies and governments – like ours – without a 2050 carbon neutrality target.

But let’s go back to regional Australia.

It got cracking in the wool boom. Dad remembers it well. As you all know, Australia rode to success on the sheep’s back – but polyester and plastic ended that boom. Being a lad from pastoral WA, I know a little something about booms. But this is the best boom we’ll ever have – as there will be no bust.

Renewable energy will never end.

Regional Australia could become one of the big players in what will be the biggest industry in the world – one that is predicted to grow at a rate of US$2.5 trillion dollars per year. There’s not an industry in the world that will ever outmax that.

I say to all workers in fossil fuel industries, it doesn’t matter what your skills are – the new era of a green future needs your skills.

And I say to all the small investors and all the small businesses – you, who truly drive our economy and our employment – the renewable future is for you.

It will be through working with you, that we bring our economic and energy sovereignty, back to our country.

Imagine for a moment just one idea being considered by ourselves and Macquarie Bank.

Instead of just driving past BP, Shell and Mobil stations on our highways, we could become a self-sufficient nation of entrepreneurs, who make, not import, the fuel that fills your car or the Linfox truck passing truck.

Imagine filling up at your mate Greg’s place in Tamworth, or Steve’s place in Kalgoorlie or Julie’s place in Gladstone, or any other regional town – where they make green hydrogen right there at the station, next to the highway, from wind and sunshine around the corner – using Australian, manufactured components.

Now compare that to what we currently do, which is import over 90 per cent of our fuel from the Middle East, Asia and Africa, with imported products, leaving our energy security and our standard of living, in their hands.

Australians deserve economic choices. Committing to carbon neutrality at COP26, driving our renewable energy sectory will release massive investment, generating those choices.

And the number of jobs created will dwarf the current coal mining workforce – which, as the Courier Mail pointed out a few days ago, is actually smaller than the number of workers at Bunnings – will create choices for all of those coal workers.

But, fellow Australians, timing is critical, as other countries – and I’ve been to them, over 50 – have similar natural advantages to Australia, but aren’t dithering.

Both personally and through FFI, I’ve put billions of dollars on the line in the regions, just this week.

Judge what a person does, please, even more than what they say.

The iron ore company, a huge, heavy industry, heavy manufacturing – read, heavy carbon emitting – company I founded, committed to Net Zero not by 2050, but by 2030.

That’s why, years ago, we decided to turn Fortescue into a major green energy and green industry giant, and create the technology to decarbonise heavy industry worldwide – the missing but huge piece of the emissions reduction puzzle.

We called this new company, Fortescue Future Industries. And I’ve never been more committed to any other professional endeavour in my life.

It was at the time, a totally radical idea – but as my family and friends will tell you – anticipating and relishing challenges is I suppose in my character.

And climate change is our collective greatest challenge.

The fossil fuel industry has created the idea that fixing climate change is a personal responsibility.

This follows the lie of the plastics industry – that you throwing plastic away is your problem. Them giving you no choice but to consume in plastic doesn’t get mentioned. Some politicians and the fossil fuel sector would like you also to have no choice.

I want to give you that choice. A dirty fuel or a clean fuel – just as economically competitive.

The elephant in the room is the heavy emitters. We have to act.

Mums and Dads – who are forced to consume fossil fuel – you’re not responsible for global warming. It’s the oil and gas companies who gave us no choice, and the politicians who followed them.

Let’s look at my industry. It isn’t pretty.

Heavy industry accounts for over a quarter of all global emissions.

The Scope 3 emissions of the top four iron ore companies – what the customers of Fortescue, BHP, Vale and Rio Tinto emit – are equivalent to Russia’s entire national emissions.

That’s because our steel mill clients use coal to turn the iron ore into steel.

It’s coal that’s the problem, but we, the iron ore,  but we, the iron ore producers, must take the rap – until we give them a choice too.

Demand for steel will continue to rise, and the people who buy steel will increasingly require that it is green and zero-emissions. Steelmakers in turn will feel the squeeze and will put pressure on iron ore companies, such as my own, to produce “green” iron ore.

I love that – and that’s just the beginning of the pressure.

The solution lies in green hydrogen.

Green hydrogen is an energy carrier – but unlike fossil fuels, it’s becoming cheaper, it will never run out – and we won’t cook the planet.

It’s also a gas, which means it’s compatible with our way of life.

Highway fuel stations with the same looking bowsers, but cars that are quicker to fill up.

Cars that look exactly like our old ones but generate hardly any noise – and, of course, no exhaust.

To make green hydrogen, you simply split water – any old water, it can be wastewater or desalinated seawater – into hydrogen and oxygen using renewable electricity only.

It’s a miracle molecule, the “Swiss army knife” of energy and green products – versatile and able to decarbonise even the most challenging sectors. Iron ore, cement, steel, fertilisers, airplanes, trucks, trains, cars. There’s no end to the miracle molecule’s solution.

If you have a gas pipeline you just chuck it in the pipeline.

If you want to get it overseas, today, you can turn it into ammonia. Look outside your window, there are ammonia trucks going up and down the highway and ammonia ships going up and down the coast.

It’s a routine and established industry.

Like we truck liquid hydrogen all over the place, it won’t be long before we can ship that too.

And let me remind you, a few decades ago, people said shipping LNG was impossible – but right now it’s one of the most shipped commodities in the world and we are planning for green hydrogen – to be the most shipped commodity – in the world.

You’ve probably heard about the energy crisis in Europe and the extortionate gas prices. And let me tell you, Russia’s turning off the spigot. If Europe had green hydrogen, it wouldn’t be a problem – because green hydrogen can be made everywhere, and it’s like a battery – it stores renewable energy, solving the issue of intermittency, like we do with oil and gas, storage. This is particularly relevant to us Australians, given that 65% of all East coast’s coal-fired power will disappear by 2035, not long away.

The main constraint is the price of electrolysers and renewable energy – and we all know both are falling. The electrolysers we will make in Australia, starting in Gladstone, will cost a fraction of the price they do in Europe.

We have the technology to achieve this.

That’s why businesspeople and industrialists around the world are moving.

The Chair of Hyundai Motor Group, a visionary called Eui-sun Chung, who we are fiercely aligned with, recently announced that all vehicles will have hydrogen fuel cell versions by 2028, this decade.

Another business leader I respect – Mukesh Ambani, Asia’s richest bloke – is operating under the “1 plus 1 plus 1” principle – one dollar, for one kilogram of green hydrogen, in one decade.

Both leaders are global, industry heavyweights.

Both believe that green hydrogen is going to be, as I do – the world’s future energy source.

It amazes me that a shrinking minority of politicians, increasingly isolated – with no experience and even less knowledge – argue the toss with businesses that have been the most successful in scaling up capacity and scaling down costs in the world.

But as I always say – don’t trust what a person says necessarily, trust what they do.

So far, Fortescue Future Industries, or FFI, has secured 300 GW of renewable resources in Africa, Australia, Asia, Central Asia, Europe, Latin America and New Zealand – over four times Australia’s current capacity.

In our home country, we are taking the Green Energy Manufacturing centre at Gladstone and replicating it across Australia, at tens of sites all over the country – creating the foundation for new industries in green ammonia, green iron, green steel, green fertiliser and green cement, with thousands of jobs at each location.

In Perth, I also have a team who recently built the world’s first hydrogen fuel cell haul truck. You see them at mine sites all over the world but ours will be powered by hydrogen. We also built a drill rig… and a green ammonia-powered train… and ship engine – all in 130 days.

130 days to start the next industrial revolution.

We are also starting to manufacture our own hydrogen fuel cell drivetrains for our own trucks and making those drive trains available to every truck supplier, who wishes to pull their head out of the sand, in the world.

This month, Fortescue also committed to Net Zero Scope 3 emissions by 2040.

This Scope 3 target leads global industry – and we made it because we’ve done our homework, and now we’re going hard after it.

Fortescue must be carbon neutral by 2030, ten years earlier, to make this happen.

Take all eight of our 330 metre-long bulk carriers, take our hundreds of trucks, dozens of trains and dozens of power stations. Everything must be running on green, renewable ammonia or hydrogen and green electricity, by 2030.

It also means that by 2030, we need to have developed a method to help our customers make “green” steel.

We will do this by producing – right here in Australia, once again – green iron ore, and the green hydrogen to refine the ore to steel. All without that problem child that turned the seaborne iron ore industry into Russia for carbon emissions – coal.

Ladies and gentlemen, green hydrogen is a real solution.

Every political leader I have spoken to this week, from Barnaby Joyce to Scott Morrison, has acknowledged that we need energy alternatives, and we need them quickly.

I must admit, even mud-slinging, I-may-be-wrong Matt Canavan admits all Australians deserve a choice.

There will never be a better time – with just two weeks before COP26 – for all parties – Matt, Scott, Barnaby, everyone come on in, the Greens – to show unity and give Australians the choices they want and deserve.

And our Prime Minister, please sir, be at COP26.

We need our leadership to be selling Australia’s massive green energy potential at COP26, not be a cop-out at home.

Carbon neutrality by 2050 gives us all the choice now, rather than waiting ‘til 2050 when we’ll have no choice at all.

If we don’t make a decision now, policy makers in foreign countries will make it for us – and the rules will not be on our terms because we weren’t in the game in the first place.

I say to our country’s leaders – you have two choices.

Do nothing –  as global warming sets in, desertify our country or allow local entrepreneurs, homegrown institutions and multinationals to invest in our country going green, instead of being forced to follow that economic opportunity overseas.

Let me give the last word – you might say, ironically, in his words, to the leader of the National Party.

I caught up with him for a casual beer or two in Tamworth this week, but Barney got pretty serious over breakfast.

“It’s the economic argument that I’m listening to, Twiggy,” he said. “I might be a cynic about the capacity to fix global warming, but I’m a believer in the economic opportunities presented by it. I see how it can add to our economic position and grow our regions. I will be fine if you want to quote that, Twiggy.”

Spot on, Barney.

Thanks for the quote.

Australia, let’s get on with it.

Thank you.