Australia’s Fortescue set to supply green hydrogen to Germany’s Covestro

The logo of Fortescue Metals Group adorns their headquarters in Perth, Australia, November 11, 2015. REUTERS/David Gray/File Photo

Jan 17 (Reuters) – Australian iron ore miner Fortescue Metals Group (FMG.AX) said on Monday it intends to sign a long-term deal to supply German chemicals maker Covestro AG (1COV.DE) with “green hydrogen” and its derivatives.

Fortescue Future Industries (FFI) will supply the equivalent of up to 100,000 tonnes of green hydrogen per year once the deal is formalised, it said on its website.

“This collaboration reinforces that green hydrogen is a practical, implementable solution for a range of difficult-to-decarbonise industries,” FFI Chief Executive Officer Julie Shuttleworth said.

Under the deal, green hydrogen – a clean-burning fuel made by using energy from renewable sources to electrolyse water – will potentially be supplied to Covestro in Asia, North America and Europe from 2024 onwards.

Fortescue, which aims to become carbon-neutral by 2030, has signed a string of projects through FFI over the past year to underline its push to transition from a pure-play iron ore producer to a green energy firm.

FFI expects to spend between $400 million and $600 million this financial year to develop green trains, trucks and shipping, as welll as decarbonisation technologies.

It also expects to expand its green hydrogen production to 15 million tonnes per year by 2030.

Reporting by Sameer Manekar in Bengaluru; Editing by Kevin Liffey

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