Despite the company’s concerns over US green hydrogen subsidy rules, Fortescue has officially launched its first US hydrogen production project in Buckeye, Arizona, previously acquired from Nikola.
Now named Arizona Hydrogen, the $550m project is planned to produce up to 11,000 tonnes of liquid green hydrogen per year, to meet heavy-duty transportation demand.
Last Thursday (May 2), the Australian metal mining and green energy firm carried out and soil turning ceremony at the 158-acre site, where Fortescue’s founder and Executive Chairman, Dr. Andrew Forrest, took a shot at the US’ proposed green hydrogen subsidy rules.
© Fortescue
Forrest warned that if the Section 45V rules of the Inflation Reduction Act (IRA) which are currently under consideration are adopted, projects like Arizona Hydrogen could become “dramatically more expensive and smaller.”
Despite praising the efforts of the US in attracting global hydrogen investment, he told the ceremony companies such as Fortescue must be encouraged, and “not punished.”
Under the proposed rules, electrolytic hydrogen producers must meet the three pillar requirements of renewable energy additionality, geographical correlation and hourly matching, to secure the top tier $3/kg PTC, which sparked a host of concerns among producers.
“I support the Biden Administration’s goal to produce hydrogen in a way that prioritises sustainability, however 45V, in its current form is a straight jacket on the industry and works against the Biden Administration’s own climate goals,” Forrest said.
The project, which has been slated to add up to $187.8m to Arizona’s GDP, was acquired from US zero-emission truck manufacturer Nikola for $24m.
Read more: FFI to acquire Nikola’s Phoenix Hydrogen Hub project
Mark Hutchinson, CEO of Fortescue Energy, previously said the project would establish Fortescue one “one of the most attractive energy markets in the world, facilitated by the IRA.”
Buckeye Mayor, Eric Orsborn, said the city was “happy” to welcome the project.
“Fortescue’s investment in our community helps Buckeye, and the entire state of Arizona, continue to grow efficiently and sustainably for generations to come,” Orsborn said.
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