Fortescue buys up $35 million hydrogen project in Arizona

Fortescue Future Industries, the clean energy division of Fortescue Metals Group, has announced that it has spent $US 24 million ($35 million) acquiring a 100 per cent stake in Phoenix Hydrogen Hub.

PHH is developing a green hydrogen project in Buckeye, Arizona, near Phoenix. Phase one of the facility is planned to include 12,000 tonne-per-annum output of liquefied hydrogen through an 80 megawatt electrolyser.

According to a statement on Thursday (Australian time), it is the first major move in the US by Fortescue since the passage of the country’s $US 369 billion (about $544 billion) Inflation Reduction Act, which offers tax credits for clean hydrogen production.

“This is an exciting opportunity to work towards a fast-moving project that will lead the way in the U.S., creating new green industrial jobs for Americans, while also helping to reduce emissions once production begins,” said FFI CEO Mark Hutchinson. 

“The U.S. is now one of the best places in the world to do this, with the Inflation Reduction Act making it an ideal place to invest in green energy.”

FFI is acquiring PHH from an affiliate of Nikola Corporation, a global company specialising in zero-emissions transportation and energy supply and infrastructure.

Nikola said in a statement that Fortescue would ring the resources required “to fully develop the project and the parties are working towards a hydrogen supply agreement to support Nikola’s Class 8 zero-emission trucks.”

It added that the project is expected to see its first hydrogen production by the middle of the decade.

The development follows expressions of concern about what the IRA and its massive scale might mean for Australia’s international competitiveness for green hydrogen projects.

Guy Debelle, a director at FFI and a former Reserve Bank of Australia Deputy Governor, said last month that, “There’s a real risk that with the U.S. getting their headstart on us through the Inflation Reduction Act they are going to lock up a fair chunk of the Japanese and Korean markets.”

The announcement also mentioned the coincidence of Fortescue Metals Group (FMG) and FFI coming together as a single brand, Fortescue, “to represent being a unified global metals and green energy company.”

The change marks the 20th anniversary of the FMG brand.

Picture: The Phoenix Hydrogen Hub in Buckeye (credit Nikola)