COP26: Australia's FFI plans $8.4 billion green hydrogen project in Argentina

Australia's Fortescue Future Industries plans to invest as much as $8.4 billion to build a project for producing green hydrogen in Argentina, with a target of reaching output of 2.2 million mt/year for export by 2030, the Argentinian government said Nov. 1.

Argentinian President Alberto Fernandez announced the proposed investment after meeting with representatives of FFI on the sidelines of the UN Climate Change Conference in Glasgow.

The Australian company, which produces green hydrogen from electrolysis powered by renewable electricity, first plans to test the wind power potential in Rio Negro, a southern province in Patagonia, before building a pilot facility and then shifting into full-scale development.

At full capacity, the project will produce a total of 2.2 million mt/year of green hydrogen, enough to meet nearly 10% of the annual electricity demand in Germany, the government said in a statement.

"Green hydrogen is one of the fuels of the future," Fernandez said in the statement, adding on Twitter that FFI's investment "places our country at the forefront of the ecological transition. Argentina may soon be a global supplier of one of the fuels of the future."

Andrew Forrest, FFI's chairman, said the project will help make Argentina "a world leader in renewable energy so that it can be an exporter."

Part of the Australian infrastructure and mining company Fortescue Metals Group, FFI is considering an area for the project near Sierra Grande, a town near the Atlantic Coast in Rio Negro that once boomed when an iron ore mine was in development nearby. The mine closed in 1992.

The Sierra Grande area, like the rest of the coast of Patagonia, is known for steady winds that have huge potential for producing wind power. Little of that potential is in development.

If the wind resources prove viable for the project, FFI will invest $1.2 billion in a pilot that will run from 2022 to 2024. The first development stage will require an investment of $7.2 billion to take the production to the target amount by 2030.

Argentina's minister of production, Matias Kulfas, who was at the meeting, said on Twitter that the project will produce green hydrogen for export and will be one of the five largest for FFI in the world.

"This is a 100% exporting project," Kulfas said.

FFI will install hundreds of wind mills, build an electrolysis plant and a port for exporting the green hydrogen, Kulfas added.

This would be the first large-scale hydrogen project in Argentina, which has some of the best wind resources in the world. Last month, the Argentinian state energy company IEASA said it is considering investment more than $200 million to build a 200 MW offshore wind farm to produce green hydrogen for domestic consumption and export.

Demand for green hydrogen is expected to grow as the world seeks to transition to net-zero carbon emissions by 2050.

FFI and IEASA's proposed projects follow an Oct. 5 announcement in neighboring Uruguay to produce green hydrogen. ANCAP, the state oil company in Uruguay, plans to hold auctions to build as many as 16 wind farms to produce green hydrogen for export, starting in the next two to five years.