Andrew Forrest says net zero is a ‘fantasy’ so his goal is ‘real zero’. What does he mean – and can he achieve it? | Thermal Analysis

About $45tn of global trade revenue is covered by “net zero emissions” commitments but steel billionaire Andrew “Twiggy” Forrest thinks net zero is a “dream”.

“Now is the time to move away from net zero by 2050, which has been nothing but a fossil fuel problem,” Forrest said last week.

What was needed instead, Forrest said, was “real zero”, and he was confident his steel business Fortescue would stop using fossil fuels by the end of the year. ten while avoiding carbon consumption or carbon capture and storage.

So what is “true zero” and can Fortescue really do business with a steel industry that is responsible for around 9% of global CO2 emissions?

Attack on net zero

Forrest’s attack on “net zero” won’t win him many friends.

A global net zero commitment count by Net Zero Tracker found 60% of the 2,000 largest companies have net zero commitments covering nearly $45tn in revenue.

But the analysis also said that only 61 of those 1,145 companies’ zero-sum plans met all the integrity criteria, such as the correct use of offsets or whether the target covers the entire impact of the company. .

The original concept of “net zero” was for the global economy to eliminate almost all fossil fuel use and use technologies, many of which are unproven, to cut atmospheric CO2 directly.

But the examples are a group of large companies that buy carbon emissions, some of questionable value, to meet their emission reduction targets rather than reducing fossil fuel consumption.

Claire Snyder, founder and director of Climate Integrity, said: “Andrew Forrest is right about this: the ‘net’ in net zero is an often abused loophole.

“Fuel is the main cause of climate change, but no companies have clear plans to eliminate coal, oil and gas from their operations.”

Old lies and offsets

Fortescue’s latest climate change plan, published last month, reflects Forrest’s disdain for cutting carbon. Offsets and carbon are not part of Fortescue’s plans.

Fortescue said its annual output over which it has direct control was 2.72m tonnes of CO2 – the same as last year. Most of it comes from diesel fuel burned by freight trucks, trains and ships, and gas burned to generate electricity at its mining sites.

By 2030 Fortescue aims to eliminate all those fuels with a combination of fossil fuels (such as ammonia for transportation and clean hydrogen for power generation) and battery electric vehicles powered by renewable resources.

Simon Nicholas, global steel sector analyst at the Center for Energy Economics and Financial Analysis, said Fortescue’s operations were concentrated in the remote Pilbara region of Western Australia, giving the company ample access to sun and wind and the space needed to build them.

“It appears that the technology to enable Fortescue to reach virtual zero already exists or will soon,” he said.

“True Zero by 2030 is very ambitious, but even if they reach the goal late, they will have revolutionized gas mining and paved the way for others to follow.”

The problem is bigger

Fortescue’s biggest problem (and climate) comes when its steel goes to overseas steelmakers who use a combination of coal, gas and fossil fuels to turn iron into steel, and steel. to be iron.

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after the news release

Indirect (so-called scope 3) emissions from Fortescue’s iron ore exports and use last year were 100 times the company’s direct emissions: about 262 Mt CO2-e ( by comparison, Australia’s total annual emissions are now 440 Mt).

About 97% of it is extracted from the steelmaking process. But Fortescue has a target of “net zero scope 3 emissions by 2040” – a curious choice of the term “net zero” given by Forrest to dislike.

But could it be done?

Most of Fortescue’s iron is low grade and not suitable for a process known as Direct Reduced Iron, where the iron is reduced to steel using gas. But this DRI process could be emissions-free, Nicholas said, if the gas could be replaced with pure hydrogen.

Fortescue says it is working on ways to transform DRI’s operations that will allow it to use its low-grade oil to produce “green metal”, while continuing to develop grade deposits. high (as is its large Iron Bridge mine). The company is also building a pilot plant for the production of crude steel.

The company told analysts a few months ago that “pursuing green metal production” was the next planned step.

Once you have the steel, about a third of steelmakers use electric arc furnaces to produce steel and these can also be run on recycled materials.

“The technology to decarbonise steel and make steel is now available,” said Nicholas.

“Arc generators and renewable energy are mature technologies. DRI is also mature and used today in commercial contexts…

“The technology to do this on a commercial scale is available now,” he said, pointing to a crude steel production facility in Sweden.

Pure power and influence?

But questions remain about how much control Fortescue can have over the source of power generation for electric arc furnaces.

Furnaces not powered by renewable electricity but using Fortescue ore or green iron would still leave the company with 3 outputs.

“The main challenge is what happens to Fortescue’s crude steel production in the future when it reaches steelmakers in places like China,” Nicholas said.

In this case, Fortescue’s strategy simply says that it will “engage” with customers and create a “green steel value chain”.

Temperature Check asked Fortescue why it used the term “net zero” for its 3rd objective and how it can convince its customers to go “real zero”.

A spokesman for Fortescue said ending fossil fuel dependence was “the only way to meet the global warming targets of the Paris agreement” and the company supported “all companies and governments” to phase out fossil fuels. old “before 2040”.

Fortescue was working with “world-class science-based organisations” to understand ways to “find the best Scope 3 targets”, a spokesman said, adding that the company could change its status.

“Fortescue has a no-nonsense policy [carbon] it reduces its real goal of zero 2030 and only supports real decarbonisation solutions such as investment in green steel and other processes needed to eliminate 3 production in the steel industry.

“If every company takes the necessary steps to reduce their production of 1 and 2, for which they are directly responsible, the production of the world 3 will decrease quickly.”