Fortescue abandons carbon offsets to fuel ambitious decarbonisation plan

Iron ore giant and renewable energy pioneer Fortescue has announced its decision to cease purchasing carbon offsets starting this fiscal year.

Fortescue has redirected all funds previously allocated for carbon offsets toward its decarbonisation strategy, aiming to achieve Real Zero by 2030. This shift represents a significant financial commitment, equivalent to several hundred million dollars in the 2024 fiscal year.

“While Real Zero by 2030 is our long-term Scope 1 and 2 target, our short-term target is for our emissions to reach their peak by 2025/26 because of a new mine coming on board and then to significantly decline in 2027/28 as all of the green technology and renewable energy that we are investing in right now kicks in – achieving zero emissions by 2030,” Fortescue Metals CEO Dino Otranto said at the launch of Fortescue’s Break Up from Fossil Fuels campaign.

“We are the only heavy emitter in the world to stop purchasing voluntary offsets. We will focus our efforts on eliminating the million litres of diesel we use per year, rather than offsetting them.

“Our first battery electric haul truck is now on site as we prepare to replace our fleet with zero emission trucks and equipment with battery electric and green hydrogen models. We are also ramping up our renewable power on site to replace fossil fuel power with renewable electricity.”

Fortescue Energy CEO Mark Hutchinson said that Fortescue’s decision to lead during the climate crisis reflected the company’s commitment to our shareholders.

“For years we have been saying that voluntary offsets don’t work – they just pass the buck. We are here at UNGA as a heavy emitter that is saying no to a future of fossil fuels and yes to a better future for our company.”

During the 2024-2025 financial years, Fortescue will prioritise several key initiatives. These include the completion of their inaugural 100 MW solar farm, the initiation of construction for two additional 220kV transmission lines connecting all their mines into an integrated electricity grid, and the attainment of a final investment decision on three more solar farms, signifying a commitment to add over 1 GW of solar capacity.

Furthermore, the company is aiming to reach a final investment decision on a large-scale wind farm and allocate substantial resources, amounting to several hundred million dollars, toward the design and development of zero-emission solutions integral to their decarbonisation efforts. This investment encompasses funding for Fortescue’s battery electric and green hydrogen haul truck fleet, the creation of a zero-emissions rail system for transporting iron ore from mines to ports, and the deployment of their initial electric excavators for operational use on site.

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