15 Mar, 2021
Coal-fired blast furnaces to be extinct by 2050, Fortescue chairman says
Fortescue Metals Group Ltd. Chairman Andrew Forrest believes that coal-fired blast furnaces will be extinct by 2050 and defended the company continuing to omit Scope 3 emissions targets on the downstream uses of its iron ore.
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| Fortescue Metals Group Chairman Andrew Forrest, who obsolete by 2050. |
"I don't think there will be a coal-fired blast furnace in operation by 2050, period," Forrest told a March 15 media call after Fortescue fast-tracked its carbon neutrality target from 2040 to 2030.
BHP Group said in a November 2020 analysis of global steelmaking decarbonization technologies that even in its lower carbon case with an enhanced circular economy assumption driving higher scrap collection, the use of traditional blast furnaces and basic oxygen furnaces would still account for over half of global steelmaking by 2050.
BHP CEO Mike Henry told shareholders March 11 that though hydrogen will eventually "have its day," its use in steelmaking is "quite challenged" and it would be some time before the process becomes economic.
The Australian government's chief science agency said in 2018 that steel production using hydrogen is "unlikely to occur" before 2030 due to the maturity of technology at the time. However, Forrest said such technology has changed since then.
Forrest said "all those calculations will have to change" following Fortescue's March 15 announcement, which focused on plans to deliver several key projects by June 30. By this time, results from ongoing laboratory testing with small-scale trials will be ready for the company's planned green steel pilot project, Fortescue Future Industries, or FFI, CEO Julie Shuttleworth said in the media call.
Forrest had announced in January that construction on the green steel pilot project would start in 2021.
FFI, a Fortescue subsidiary, is scoping out the green steel pilot plant for Western Australia, Shuttleworth said. It will take renewable energy from the miner's wind and solar initiatives in the Pilbara region and convert iron ore to green steel at low temperatures without coal.
FFI also set June 30 as a target for a green ammonia-powered ship design to test new ammonia engine technology at scale. FFI will also test large battery technology in Fortescue's haul trucks and hydrogen fuel cell power for its drill rigs. It is also trialing technology for Fortescue's locomotives to run on green ammonia.
Fortescue CEO Elizabeth Gaines told media that the company's own "march to carbon neutrality" will include sharing technology and findings, which will in turn "contribute to a broader decarbonization, for example in the shipping fleet, which is a big contributor to Scope 3 emissions."
"We're getting on [with the decarbonization task] in a practical way rather than setting a target for Scope 3 reductions," Gaines said.
Forrest went on to say that if Fortescue's customers in Japan and China wish to stop burning coal in their blast furnaces, they need an alternative.
It is thus "absolutely pointless asking any iron ore company" to have to report the Scope 3 emissions of their customers, particularly when "they're selling them coal, and offering them no alternative."
BHP also produces and sells metallurgical coal, while Rio Tinto exited Australian coal in 2018 by selling its Kestrel thermal and metallurgical coal mine in Queensland.
Forrest said Scope 3 emissions "platitudes" achieve nothing, because "if you want to change an industry you need to provide ... a commercial alternative which is carbon free."
In a March 15 statement, the Australasian Centre for Corporate Responsibility noted that Fortescue's commitment failed to set a target for the Scope 3 emissions from steel production, "which is easily the largest part of its carbon footprint."
However, "Fortescue's commitment to developing hydrogen for use in shipping, rail and drill rigs, and batteries in haul trucks is a huge step forward. With the enormous profits they are currently counting from iron ore, BHP and Rio Tinto must do the same," said the Australasian Centre for Corporate Responsibility's climate and environment director, Dan Gocher.
Shuttleworth said FFI was in talks with Brazilian iron ore major Vale SA about using green ammonia as a shipping fuel, and Forrest also indicated willingness to share knowledge on using hydrogen in steel production.
"Everything we can do to facilitate their journey through our own example and through supply on commercial scale of carbon-free fuels, we will do, for Vale and for other companies," Forrest said.