Twiggy pens multi-billion dollar green hydrogen deal to transition European energy away from Russia

Twiggy pens multi-billion dollar green hydrogen deal to transition European energy away from Russia

Fortescue Future Industries chairman and founder Andrew 'Twiggy' Forrest (provided by FFI).

Australian billionaire Andrew ‘Twiggy’ Forrest’s green hydrogen company Fortescue Future Industries (FFI) has announced a transformative partnership with one of Europe’s largest energy infrastructure companies to decarbonise the continent's energy supply and fill the hole left by Russian gas.

The ambitious deal with energy network and infrastructure operator E.ON, which has more than 50 million clients, will see FFI deliver up to five million tonnes per annum of Australian green hydrogen (GH2) to Europe by 2030.

While the focus of the deal is to decarbonise Europe’s energy supply, the timing of the partnership comes as the region is being forced to reduce its dependence on fossil fuels from Russia - a result of sanctions imposed on the nation following its invasion of Ukraine and the European Union’s desire to reduce carbon emissions.

Both FFI and Essen, Germany-based E.ON have signed a Memorandum of Understanding (MoU) to execute the plan, with each side committing to a research and study partnership.

The deal is expected to significantly reduce Europe’s reliance on Russian gas - the five million tonnes per annum of renewable GH2 is equal to approximately one third of the calorific energy Germany imports from Russia.

Twiggy himself flew to Berlin to sign the deal which will see both companies work together in collaboration with governments to achieve supply as fast as possible and decarbonise thousands of medium-sized enterprises in Germany, the Netherlands and other European cities and communities where E.ON distributes energy.

As confirmed in an ASX statement issued by FFI parent Fortescue Metals Group (ASX: FMG), Forrest said at the signing of the MoU in Berlin that the partnership would “be like a duck swimming”.

FMG confirmed Forrest said the two companies’ executives would be “really calm”, but “underneath, our organisations will be going like crazy, because for us it’s a minimum $50 billion expenditure”.

Parent FMG said Forrest’s statements were a “high-level assessment by the chairman of what such a major project may cost and is appropriate in the environment the statement was made to provide context and scale of the potential of the MoU”.

“Fortescue clarifies that there is no commitment to this expenditure and all such final investment decisions will be at the sole discretion of the Fortescue Board.

“Fortescue has committed 10 per cent of NPAT to FFI - an estimated US$1 billion in FY21.”

Nevertheless, Twiggy did not downplay the significance of the deal with E.ON.

“The announcement of this historic partnership today aims to diversify the future energy security in Europe. Green energy will reduce fossil fuel consumption dramatically in Germany and quickly help substitute Russian energy supply, while creating a massive new employment intensity industry in Australia,” FFI chairman and founder Forrest said.

“This is a cohesive and urgently needed part of the green industrial revolution underway here in Europe.”

It is intended that such large amounts of renewable GH2 will be powered by Australia’s immense renewable resources as well as FFI’s other planned global projects, and will be distributed by E.ON. The parties have also agreed to work together to analyse what solutions could look like to solve infrastructure issues and to build a secure value chain.

“We cannot keep gambling our energy security and the planet’s future on fossil fuels. Green hydrogen is the practical, implementable solution to decarbonise and lower emissions,” FFI CEO Julie Shuttleworth said.

E.ON CEO Leo Birnbaum said GH2 was a crucial part of the company’s plans to drive forward the green energy transition in Europe.

“Renewable GH2 is a key element to achieving this task, while at the same time contributing to a secure and affordable future energy supply,” Birnbaum said.

“Our partnership with FFI is an important milestone on this path. Two major international companies are joining forces to build a “hydrogen bridge” from Australia to Germany and the Netherlands, based on shared values and the joint capability of realising the scale of such a project.

“Two together make decarbonisation possible for many, which is an encouraging message, especially in these days.”

The partnership is the latest in a string of clean energy deals signed by Forrest whose FFI is on a mission to transition energy supplies to renewable green hydrogen.

Earlier this month, Twiggy and fellow rich-lister Mike Cannon-Brookes led a $210 million Series B raise to support Sun Cable’s Australia-Asia PowerLink project.

The project is expected to be the world’s largest intercontinental renewable power system, and will involve a solar generation precinct near Elliott, just north of Tennant Creek in the Northern Territory, with 800km of overhead transmission to Darwin and 4,200km of undersea power cables between the coast and Singapore.

Forrest’s FFI also penned an MoU with aviation giant Airbus in early-March, with the alliance formed to decarbonise the aviation industry through zero-emissions green hydrogen.

As part of the agreement, both companies will leverage their respective knowledge to support the entry-into-service of a green hydrogen-based aircraft by 2035.

Twiggy Forrest's latest partnership comes two days after his investment vehicle took a 4.9 per cent stake in Perth-based Austal (ASX: ASB) for $33.8 million.

As a result of on-market purchases, Tatterang now has an approximately 8 per cent holding in ship builder and defence contractor Austal which was founded in 1988.

Get our daily business news

Sign up to our free email news updates.

Please tick to verify that you are not a robot

ERP: Your ticket to better business visibility, control and efficiency
Partner Content
When it’s time to evolve and mature as a business, the process of choosing the ri...

Related Stories

Costa board accepts $1.4b takeover offer from Paine Schwartz, Driscoll’s and BCI

Costa board accepts $1.4b takeover offer from Paine Schwartz, Driscoll’s and BCI

One of Australia’s largest fruit and vegetable producers, Cos...

Sustainable tourism startup Wander seeks up to $5m from crowdfunding campaign

Sustainable tourism startup Wander seeks up to $5m from crowdfunding campaign

Wander, an innovative hotel chain startup with an eye on susta...

Australia's top home builders revealed

Australia's top home builders revealed

Melbourne-based Metricon has kept its status as Australia's lar...

Aussie Greenhouse Challenge Platform driving near-zero steel initiative by 2030

Aussie Greenhouse Challenge Platform driving near-zero steel initiative by 2030

Sydney-based Greenhouse Challenge Platform will be powering a new i...