Bernice Lee
Hi, good afternoon, everybody. A very warm welcome to this Chatham House members’ event on Is Green Hydrogen the Heir Apparent to Fossil Fuels? My name is Bernice Lee. I’m the Research Director for Futures here at Chatham House. We are very honoured today to have a very distinguished panel with us, who I will – which I will introduce very shortly.
Now, this event is held on the record and is being recorded. Now, we also – in addition to our audience, who are braving the weather in London to join us in person, we also have an online audience, as well, today, and so, please use the raise hand function and chat function. The – sorry, forgive me, please use the Q&A function to put the questions you want to ask throughout the event, as well. And any audience member would like to tweet, please use the #CHEvents to tweet, as well.
I mean, as I was doing my prep for this meeting, I did a lot of Googling in the last couple of weeks and read up and I’m, kind of, quite aware of the fact that I’m not really going to be able to catch up with my distinguished panel today, so, I’m not really going to try that hard to do so. So, before I give my very quick introduction, I would like to introduce our panel today. So, we have, first off, Dr Andrew Forrest, who’s the Non-Executive Chairman and Former CEO of Fortescue Metals Group. We have also Malcolm Turnbull, who’s the Prime – Former Prime Minister of Australia in 2015 to 2018. And we also have Johannah Christensen, who’s the CEO of Global Maritime Forum.
Now, again, my little bit of Googling, in the last couple of days, suggested that we are actually right on the mark when it comes to this topic, which is whether or not green halogen is heir to fossil fuels and can it deliver on a more eco-friendly future, provided it is produced without material emissions? So, what are its green potentials? And of course, not surprisingly for any of you who are in the audience today, if you did a casual Google, you will find that, actually, the names that are coming up immediately on the screen as soon as you Google ‘green hydrogen’, are the likes of BP, Shell, the Saudi Aramco. What else did I see? Oh, I saw Total, as well, and Iberdrola is another one, I remember. In other words, it is obviously not – you know, not necessarily just full of new industries, but also quite a lot of the older guard, so to speak. And if I having a quick glance at The Economist, as well, was also describing how many of those who were part of this new industry are part of what they call the ‘grubby’ parts, as well.
Now, that may not be necessarily a best set way for me to start introducing Dr Andrew Forrest in more earnest…
Dr Andrew Forrest
True.
Bernice Lee
…who will kick us off, because he is Australia’s most active Philanthropist and among the most effective business leaders of his generation. He’s the Founders and looking – and Non-Executive Chairman of Fortescue Metals Group and now, he also, actually, which will really put me to shame, is that he recently come to – he’s had a four-year PhD in marine ecology, as well. But most importantly, perhaps, is my very casual Googling of green hydrogen suggested to me that he has been a man on a huge mission. So, you know, your mission is probably increase the amount – number – amount of coverage on this very important topic. Probably, you know, tripling it in the space of a very short space of time. So, I’m just – I didn’t really quite manage to do the Google statistics to look at, since you and Malcolm entered the sphere with your amazing op-ed a couple of weeks ago, whether or not you actually dramatically drive up the traffic, and I think my answer is yes, it did. But you’re a man on a mission and I was wondering whether or not you want to, sort of, tell us a bit about your mission right now. This is obviously the first time the world is fascinated with hydrogen, or for that matter, green hydrogen.
Dr Andrew Forrest
No, exactly. I mean, both of those have been around for several decades, but they haven’t had a lot of support. You’ve seen Margaret Thatcher and George Bush the 1st first starting to warn the world about global warming, and then you saw a very effective massive lobby, even against those two incredibly powerful people, and their message got lost into the wilderness. Now, several lost decades later, we’re facing a absolute crisis point and you’re seeing the same playbook. You know, it – the same, “It’s all going to be okay. Just let’s kick the ball down the road a little bit longer,” playbook. The fact that you cite, that the top people you – that come up in green hydrogen are all fossil fuel players, is their playbook. You know, they pay to get there and it’s to confuse and obfuscate.
But when I first started working in hydrogen, I was a little kid and, you know, when I learnt that you could make something from water that burnt and when you burnt it, it created an enormous amount of energy, and then it went back to water, I thought this is alchemy. This is like Harry Potter Rides Again. You know, it’s just an amazing molecule and the more we started to look at it, as Fortescue, when we became formal about this battle 11 years ago, it started to reveal itself to us as this, kind of, Swiss army knife of everything. You can make steel from it, you can make fertilisers, you can make geotech cement. You can, of course, make any form of mobile power, and yet, it seemed to be suppressed.
And our – I’ve had a number of epiphanies in this little journey, since 11 years ago. One was when we’re able to secure what is a bulletproof Plan B. My company’s seen as being a risk-taking company, ‘cause it’s grown so rapidly, but it’s, in fact, not. It has a bulletproof Plan B in every risk it takes, and our bulletproof Plan B to really enter the hydrogen sector really hard was the ability to procure a technology, which allowed us to convert hydrogen to ammonia and then back again. And that allowed us now to store and ship hydrogen, as ammonia, a very efficient vector for the hydrogen molecule.
I then, as you just mentioned, sent myself back to school. I wanted to really understand the environmental science behind the whole global warming issue and the whole threat to the oceans. I expected the threats to be what I was really specifically studying, which is plastic, industrial overfishing, fishing subsidies and the like. But the elephant in the room all the time came back to the devastation of species and their forced migration through the warming of the oceans, in fact, the dioxygen and the expelling their air and fish not being that efficient breathers, unlike mammals, are not moving for food any longer. They’re moving for the first time in our Anthropocene that – just moving to breathe, moving to find oxygen. And I found that realisation devastating and it really amped up Fortescue’s intent to use itself as a – if you like, the person out in the front of the heavy industry, heavy emitting world, with clearly, the arrows in the back.
But we realised that all these companies who are making all these grand statements about going green don’t actually emit a lot of carbon and – or worse, methane. And I realised that they should all get a slow clap, but that’d be about it, because global warming is in the heavy industry sector’s hands and you need a heavy industry, which society relies on, to go green. And of course, all the customers to heavy industry, in my case, millions of people who consume steel, directly and indirectly, they’re all aligned on us going green because we’re forcing them to be carbon emitters, indirectly. And we really did our research thoroughly. We wanted to test whether or not there was sufficient energy in the world to thoroughly replace fossil fuel.
We did travel to some 60 countries and during the middle of the pandemic, that was not a piece of cake, but we came out knowing that, for the first time, not only could we thoroughly replace the fossil fuel sector with everything it does, plus the products made from fossil fuel, we could also absolutely ensure, if we get the policy settings right, that countries become energy independent. They become their own sovereignties of their economic growth through the backyard they have, which is full of renewable energy. And if you’re full of renewable energy, then by extension, with the cost of electrolysers collapsing, you can be full of hydrogen and then become your own energy independent sovereignty, like Britain should be.
And so, we became more convinced, again, and that’s when we decided to commit our company to going fully green by 2030, laughed at, scoffed at, jeered by our colleagues in the industrial world, but very relieved that we did it. And it brought me to that other point about the evolution and that’s me challenging my team. So, we have a staff of about 16,000, just for FFI about 650, but challenging the team to come up with a solution to everything which emitted carbon, from our ships, to our trains, to our trucks, our fixed plant, and to go to the hardest to abate sectors, like, say, our trucks. And I gave them three months, so we put ourselves under deep pressure, three months to take the drivetrain out of these huge haul trucks, which, you know, about the size of this room, and wheels, obviously, much, much taller, and to invent a hydrogen fuel cell to drive that truck and install it and commission it in that three months. And I was staggered when they actually achieved it and that truck has all the performance of existing heavy fuel guzzling, carbon emitting truck, which we currently have. But at the same time, they also began commissioning a train engine, which is now running on about 75% green ammonia and at the same time, a ship’s engine. So, we’re now out buying a large ship to put this technology into, which is now running between 80 and 100% on green ammonia. And this is telling you this is the start of the green industrial revolution, and it took to get going, three months. So, I’m saying something clamped down on all that knowledge, something that stopped all that innovation.
There was forces there which silenced Bush, which silenced Thatcher and are seeking to silence us, and that is now called the blue, or grey, hydrogen industry. And if we run down the wrong rabbit hole again this time, then what I’ve learned in my PhD is that the world will hit its own turning point, where the methane being emitted from the oceans and the terrestrial environment will begin to accelerate, like it’s doing right now, and then global warming will just continue on with us, but having no control whatsoever.
Bernice Lee
Well, thank you very much, Mr Forrest, for laying the case for how important it is that the high emitting sectors have to start first. You also point to how you see hydrogen as a bridge, in some ways, between where you were and where the vision needs to be. You also outline, obviously, the fact that hydrogen isn’t one thing, and I thought this may be a good time for us to move to Mr Turnbull, if we may, which is that, you know, Andrew already mentioned that there are green hydrogen, grey hydrogen, the whole colour scheme of them. How can we tell the wheat from the chaff?
Malcolm Turnbull
Well, the – with some difficulty, you’re right, because the molecule, the hydrogen molecule, has the same properties, chemical properties, in this context the, you know, ability to generate energy when its burnt, for example, regardless of where it came from. So, the key – where it came from is absolutely critical. The provenance is everything. See, at the moment, most hy – we all – people – everyone understands the importance of hydrogen as a fuel and I mean, it – that’s been understood for several hundred years. So, the problem has been how to make it. Now, most hydrogen today is made from natural gas, some from coal, but most of it’s from natural gas, which is CH4, and that is produced in a process generally called steam methane reformation, where you, essentially, cook the natural gas with steam at very high temperatures. And there’s a couple of steps in the process, but the outcome, finally, is hydrogen and a lot of carbon dioxide, right? And the process of making hydrogen, which is mostly used for fertilisers, today generates about 2½% of global greenhouse gas emissions. So, yeah, if you have a nice hydrogen fuel cell car, as you’re doodling – you know, driving down the road, your tailpipe will be emitting water, and that’s super and you can feel very good about it. But the way that hydrogen molecule got to your car resulted in enormous carbon dioxide emissions.
So, that’s – there’s – therein lies the problem. What’s the answer? Well, the answer, and this is what Andrew is doing, you know, on an epic scale with Fortescue Future Industries and what we’re advocating with the Global Green Hydrogen Organisation, Jonas Moberg, the CEO is right here, there he is. Join up, sign up to the Green Hydrogen Organisation. What we’re doing is making hydrogen with renewable electricity. So, from hydro, from solar, from wind, you know, and often a combination, too. You know, you – I mean, pumped hydro can be a great adjunct to variable renewables, and I think Eddie Rich from the International Hydropower Association is online with us here. They’re very involved in this.
So, that’s the challenge, how do you do this at scale? How do you do this in a way that is going to be cost competitive? And that is what Fortescue Future Industries is about. Andrew brings some remarkable qualities to this. He has, as you’ve heard, enormous passion and commitment to this. He is an innovator, he is courageous, his whole career and his success speaks to that. He’s relentless and resilient. He’s also got enormous financial resources, which is very handy, but in addition to that, he leads an organisation that has been built on people who are Engineers, Scientists, builders of roads, rail, port, mines. You know, all of this work, and we described some of it with respect to the hydrogen fuel cell truck, that’s, you know, that’s part – that’s in the DNA, so it’s a great combination.
So, what’s the problem that we’re facing with blue hydrogen? This is it. Grey hydrogen, which I spoke about earlier, is highly CO2 emiss – you know, emissive. The fossil fuel industry don’t want to go out of business, funny about that, and so, their solution is to say, “Hey, don’t worry about the CO2. We’re going to put it under the ground. We’re going to put it in a hole in the ground, carbon capture and storage.” This has been around for years.
When I was John Howard’s Environment Minister, you know, 15 years ago, we were putting a – we still thought it would work, or could work, and we put a lot of money into it. Governments around the world are putting billions into it. Regrettably and not through lack of trying, it does not work. It hasn’t – other than in a few niche areas, it has not worked, and it’s essentially being used now as a means of delaying the transition to the only type of hydrogen we should have is green hydrogen. So, that’s what this is all about. The hydrogen, we need the hydrogen, yes, absolutely, but if it isn’t green, we are not going to achieve the big goal, which is to decarbonise our energy system and save our planet.
Bernice Lee
Brilliant. I think what is really refreshing to hear is that you are starting off with the greenest option possible, both of you, and therefore, this is something to aspire to. And we are hearing quite a lot now, Johannah, which I’ll come to you in a second, from the two gentleman and from, you know, sort of, speaking passionately about the need for and, also, you know, hopefully, the availability of this very important source of energy for the future. I mean, you are the CEO of the, you know, Global Maritime Forum. You just had – come from your meeting at the IMO for a couple of days. I think you hosted Andrew, actually, as well. I mean, you are, obviously, going to be one of the major sector where this is going to be relevant. I just want to hear from you what you have learned, in the last couple of days, from your sector, from the debates you’re having, in terms of this being a part of your future, as well?
Johannah Christensen
Yeah, thank you very much, and yeah, indeed, we have just come out of a really great meeting with about 200 leaders from across the maritime sector, who all face this tremendous challenge, which shipping is one of those dirty sectors, as you say, the – a sector that has been – that has – that is consuming 200-300 million tons of fuel on an annual basis and emitting 2-3% of greenhouse gas emissions. So, it is one of those sectors that we need to work the hardest on. It’s also a sector that, you know, the fuel that shipping uses at this point is the very bottom of the barrel. It’s the cheapest, the very end, it’s the stuff that’s left at the end of every single supply chain, so it is incredibly cheap, compared to any other product that’s higher up that production chain, if you will.
And I think one of the things that excites us so much about the work that Andrew and his team are doing is that he is so heavily focused on how can we make this new product – how can we make green hydrogen cost competitive with the fuels that these heavy emitting sectors have been using so far? How can we make these technologies cost competitive and available at great scale to these industries, who all need them in order to full decarbonise? In order to decarbonise shipping, we need a global supply of hydrogen that is cost competitive with the fuels that, frankly speaking, are cheap and, in part, because, of course, also some of the costs are externalised, right, the environmental costs, etc. So, that is an incredibly important part of that.
Shipping also represents an opportunity and I think that’s part of what you spoke to and why you’re focusing on shipping as one of those sector. It is a sector that represents a long run offtake opportunity and one that can move soon. And there are some really specific opportunities that are available and in fact, Andrew sits on one of those opportunities. There’s a trade corridor of iron ore that goes from Australia up to Asia. There is a – Australia’s one of those countries that can produce green hydrogen at the – in the most cost competitive way at this point, right, because of the costs of the renewable energy, right? So, there is a – Andrew sits on that opportunity, and I think that’s exactly what we need.
I think the other thing that I find so exciting, and which you shared with those leaders that we had at our event earlier this week, was that you were focusing on getting the technology tested and out and operating on the water, because I think at this point, that’s still the greatest barrier to adoption. It’s a – it is not yet in play. It is not – it has not yet been deployed. So, the sooner we can get those engines out in the ships and operating on the deep seas, that’s when it takes off, right, that’s when it takes off.
Bernice Lee
Interesting, the corridor question is an interesting one, because this is exactly where – I mean, you know, obviously, there’s a lot of distinction that you’re trying to make between green hydrogen versus other type. But actually, the corridors is where the old and the new industries have to come together, don’t they, while those two really work?
Dr Andrew Forrest
Let me give you an example and thank you for singling us out. We’re just going to do it. We’re going to put a ship’s engine, which we’ve commissioned on green ammonia, into a ship and see what happens. So, we’re not going to debate it, talk about it, pontificate over it, we’re just going to do it. And I wanted to share with you what I see as this, kind of, microcosm, this example of where the whole world is going to go. We announced the other day, and it helped get the huge media empire, News Corp, to start backing global warming activism, ‘cause they just saw the writing on the wall now, but there’s a huge fossil fuel driven fertiliser company, which was going broke on this large fact – in this large factory on Gibson Island in East Brisbane. And the price of gas had gone up so much that their product, fertiliser, was now going to the farmers at a cost where the [inaudible – 34:12] were telling me, in Tamworth, New South Wales, that they’re now choosing between buying fertiliser for their crops or their kids’ education. So, which one?
And that pressure’s coming back onto Incitec Pivot, the big fertiliser company and they’re saying, “We’re going to shut this plant. We can’t handle all this grief,” you know, and trying to work 440 people whose families rely on them, and we said, “Well, hang on, don’t do that. We’ll get green electricity from over the road. We’ll put in electrolysers for you, and we’ll give you hydrogen, and it’s the right colour this time, it’s green. If it’s not green, it’s dirty, and we’ll put that green hydrogen straight through the fence.” And the Chief Executive just said, “Well, if you’re going to do that, we’re now going to invest in that plant, we’re going to keep all those jobs, we’re going to employ more people and we’re going to bring down the cost of fertiliser thanks to green hydrogen.”
Bernice Lee
I had a dream, a couple of years ago, actually, where I hoped that we could use the EU-China collaboration for green ammonia, put them in trade corridors in Africa. At the time I was thinking EU-China, partly because China invest – Chinese was investing – were investing in Africa. EU, at the time, because I thought that at the time, the hydrolysers were mainly Siemens and I thought of European technology, and I thought that actually, fertilisation is a big problem. Otherwise, we’re going to use a lot of coal-based fertilisers at the time. That was a couple of years ago. I’m not entirely sure what happened to this idea, but nonetheless, it’s one such…
Malcolm Turnbull
Push it.
Bernice Lee
Yeah, definitely. But I think that this is the interesting thing about the green hydrogen debate, is that it is now catalysing a lot of other thinking, such as, for example, green steel, for example. I don’t know whether, Malcolm, you want to come in on that question? I mean, green steel is obviously one such area where it’s very tied up with the future hydrogen economy, at the moment, at least, and you know…
Malcolm Turnbull
Yeah, well it…
Bernice Lee
…the future…
Malcolm Turnbull
Well, it is.
Bernice Lee
…will be the point.
Malcolm Turnbull
And it has been – it is being made. I mean, and it’s been made, I guess, as I, you know, pilot project in Sweden, but the chemistry is still making – it’s actually very complex. But in the first instance, the object of a blast furnace is to get the oxide out of ferrous oxide, out of iron ore, and that is done by, obviously, burning it up with coal, metal – what’s called metallurgical coal and the oxygen in the iron ore reacts with the carbon and goes up the chimney as carbon dioxide. And you know, that – again, I’m not a Steelmaker or a Metallurgist, but you know, that process, steelmaking, is about 8%, I think, isn’t it, of…
Dr Andrew Forrest
It is.
Malcolm Turnbull
…global greenhouse gas emissions and you can do that with hydrogen. Because you have exactly the same process of combustion, if you like, and the oxygen and the iron ore goes up the chimney as H2O, steam in other words, water. So, this is a – again, I’m simplifying something that’s actually – that’s easier to describe than to execute, but it is very doable, and that’s – so, you know, that’s another big application. I mean, I – hydro – the combination of electrification and green hydrogen will save the planet, fact. You need both and you need a lot of renewable energy, and you need a lot of great technology, but we’ve actually got the tools to do the job now.
And again, this is another con that people will say, “Oh, we – you know, we’re just waiting for the new technology.” It’s here, it is here. I mean, 15 years ago people used to argue about how much extra you had to pay to get green electricity, renewable electricity, and it was more expensive. It’s now the cheapest. Why are coalfired power stations going out of business in so many markets? It’s not because of carbon pricing, although there should be. It’s because the variable renewables are so cheap for much of the day, they put them out of business.
So, you know, this is the exciting thing. We can have abundant clean energy that is affordable and cheaper, but we’ve got to plan it, and this is – and you’ve got to have people to build it. Hence, you need leaders like Andrew, and you’ve got to have governments that actually put the infrastructure in place. I mean, you know, I talked about hydro earlier. If you’re going to fold out – fold – you know, phaseout continuous thermal generation, like coalfired power stations, for example, with variable renewables, wind and solar, you’ve got to make sure you’ve got the ability to keep the lights on when the wind’s now blowing and the sun’s not shining. So, pumped storage, batteries, green hydrogen and – you know, and so, the answers are all there, but having said that, you’ve got to get in and build them. You can’t just talk about ‘em. And that’s the cool thing about what Andrew’s doing, he’s not speculating about ships engines and trucks, he’s actually building them.
Bernice Lee
Well, thank…
Malcolm Turnbull
And you’ll work out, it’s amazing, amazing. You’ve actually – you’ll demonstrate that it works and if it doesn’t, you’ll find a way to make sure it does.
Dr Andrew Forrest
Start again.
Bernice Lee
Well – but thank you. That’s a very important economics question, which is one of the reasons why this is – this time round, the dream is a bit different. The economics of renewables have changed. And I’m thinking that it’s also probably quite good to bring some questions in gradually. My panel asked me earlier on, “What should we expect of the engagement level from our audience here? How scientific and numerate are they?” So, I’m going to start reading a question from here and then, you can judge for yourself how numerate our online and other audiences are. And then, after that, I’m going to start taking some questions from the audience, as well. If you start signalling to me gently that you would like to ask a question here in person, which I’m always impressed by how we are gradually bringing audiences back in, in a socially distanced way.
Malcolm Turnbull
Yeah.
Bernice Lee
But from the audience online, I thought it might be helpful to bring a question in. I don’t know whether or not you want to ask it yourself or you want me to read it out. I was thinking that…
Malcolm Turnbull
You read it out.
Bernice Lee
I will read it out now. Colin Smith, unless you would like to ask it, I’m going to say, “Great to see – hear Fortescue is pursuing technical fuel alternatives in shipping/heavy trucking, but how much is the cost of the hydrogen and ammonia relative to the more usual alternatives? Three to five times, I would guess,” he says, “if not more, which explains why there has been no suppression of the technology.” It’s really a statement, but how would you like to respond?
Malcolm Turnbull
I’d like to ask Colin if he works for the fossil fuel sector and that it…
Bernice Lee
Do you, Colin? We don’t know, but…
Malcolm Turnbull
I don’t know, but secondly, I’d like to say, well, how would he know, ‘cause he’s not in the green hydrogen business? I’ve seen green hydrogen being estimated at these – at prices by everyone who’s not in it and they’ve been, actually, the fossil fuel sector making blue-grey dirty hydrogen and speculating what it would cost. So, I can’t drive a green hydrogen car at this stage to Glasgow, because there’s not enough green hydrogen in Britain to be able to do it. So, my view is that we will bring the costs of green hydrogen down. Right now, it’s about compatible to natural gas. Now, can anyone tell me do you know of a fuel which is going up and up and up? Well, yeah, I can tell you, all fossil fuels, and I tell you just one fuel which is going down, one, green hydrogen.
So, I tend, as a businessperson, to go with the trend. I like this trend. We’re going to aim for $2 a kilo. Mukesh Ambani, the biggest Industrialist in South East Asia, he thinks he’s going to get it to “one plus one, plus one,” he calls it, $1 for one kilo in one decade. Now, it’s certainly all over for the fossil fuel sector if that happens, but you know, that’s – words are cheap. We’re going in hard to make it competitive. I think if I’m burning, I hate to say this, a billion litres of diesel a year, plus marine grade oil, which is a fancy name for a hideous oil, then if I can make all that energy, and I was speaking about economic and energy sovereignty for Britain, if I can make all that energy myself, then I can probably save four or $500 million dollars a year. And that’s the message to the big industrial emitters out there, go green, ‘cause it’ll save you money.
Bernice Lee
Yeah, I mean…
Malcolm Turnbull
To come back which – one point.
Bernice Lee
Please.
Malcolm Turnbull
Just a kilogram of hydrogen has the same energy, roughly, as a gallon of oil. So, it’s a – it is – you’re talking about getting that price of hydrogen down to $2 and $1. You can see that’s very – that is very – a cheap energy for something that can actually be transported and stored.
Bernice Lee
And it’s interesting to bring the different economics of the different sector back into the question as well, and indeed, $2 is – seems to be one of the Holy Grail at the moment, a kilogram. And, also, in so many – it’s worth reminding ourselves, as well, that right now, green hydrogen is what, like 1% or something, of the total mix? So, still…
Malcolm Turnbull
It’s tiny.
Bernice Lee
Yeah. So…
Malcolm Turnbull
It’s 75% of the universe.
Bernice Lee
Indeed.
Malcolm Turnbull
Right, but – so, we needed to make it 100% of our energy.
Bernice Lee
So, I mean, I’m curious to hear more from Johannah, as well, in terms of the shipping sector. What will it take for the economics to really work and what is, sort of, the, almost like the minimum offer from your perspective?
Johannah Christensen
I don’t know if that – I have that answer, exactly, but I think there’s – it’s a combination of different factors. I think it’s important not to lose the point that Malcolm made before, which is that costs of renewable energy over the past few decades has dropped and is now cost competitive with coal, etc. And we’ve seen that – I’ve come from Denmark and there, renewables has vastly increased as part of the – our national energy mix because of that. That took early investment from governments. That took early investment and risk-taking from some industrial offtakers, but at this point, it is cost competitive and that is how it become – it has become such a large part of our energy mix, and that is what we expect to see here.
And I think in terms of – another point that I wanted just to make sure that it didn’t get lost is a point that you made earlier on, which is the opportunity for so many countries to leverage this opportunity to become energy exporters. So, there are tens, if – tens and up to – and many, many countries, I don’t know if all, I don’t have the knowledge about that, but certainly, many, many countries that we have looked at around the world who have the opportunity to produce, not only for their own grid needs, but have the ability to produce export for industrial purposes, based on renewable energy capacity that we’ve had. We’ve looked at, for shipping specifically, Chile, Morocco, Indonesia, Mexico, Australia, many other countries around the world who have the opportunity to become energy exporters. And from my point of view, that is such a tremendous development opportunity, as well, because there are many, many middle and low income countries who have that opportunity. We should leverage that.
Bernice Lee
Yeah, exactly, and just – I just want to say that Colin has come back saying that the numbers he provided were – also came – he also provided ‘EU numbers’. But we also have another question here, which I thought might be a good general one to throw back into the mix, which is, “Which are the most challenging systemic shifts that will be required to accommodate the large-scale adoption of green hydrogen,” that you guys envisage? Most challenging systemic shifts? So, so far, we’ve heard what it should be, but Johannah, would you like to come in first?
Johannah Christensen
So, I would say that the demand side and confidence in the technologies, especially in this early phase. So, luckily, on the demand side, we’re seeing a big shift happening already. So, in the sector that I work in, in shipping, we’ve seen the customers of shipping, global companies like Amazon, IKEA, Unilever and others, committing to fully decarbonising their maritime transport by 2040. What that does is it sends a demand signal all the way down through the chain, so now container shipping companies around the world, they know they have to ship good zero carbon by 2040 at the latest. That means that they need to be figuring out how do I procure – secure a supply of zero emission fuels that I can use in order to meet my customers’ demand? And so, from that point of view, I think that’s, really, that’s the – one of the big unlocking factors.
Dr Andrew Forrest
Yeah, I…
Johannah Christensen
And I’m super optimistic on that front.
Dr Andrew Forrest
I completely agree. I often compare it to the internet. There’s no demand for the internet until it existed.
Johannah Christensen
Exactly.
Dr Andrew Forrest
Okay, and so, there is no demand for green hydrogen, ‘cause there isn’t any. Now, we’re putting our company on the table to make sure there’s a large supply of green hydrogen, and exactly as you’re predicting, we’re now getting very large orders. And we hope to announce at least one of these during COP26, with a great British organisation, and we’ll prove the demand is absolutely there.
Malcolm Turnbull
Can I just add something, just on…?
Bernice Lee
Yeah, please.
Malcolm Turnbull
In response to our friend, Colin.
Bernice Lee
And we’ve got some more questions coming in here, as well.
Malcolm Turnbull
Our friend – to our friend, Colin, on costs. So, just…
Bernice Lee
Colin, by the way, have told – just said that he is an Oil and Gas Analyst.
Malcolm Turnbull
Yeah, right, okay, well, no, but Col – well, Colin, you should check out the Bloomberg New Energy Finance latest – well, most – one of their most recent papers on the cost of hyd – green hydrogen, September 8 2021. They’re forecasting renewable hydrogen, by which I mean green hydrogen, will cost less than blue hydrogen, with – by 2030 and by 2050, it will cost less than any form – any other form of hydrogen, and they’ve modelled it over 28 countries. So, you know, it’s not – I mean, when we talk about the cost coming down, this is not aspirational. This is absolutely based on the technological trends, and I – again, going – ‘cause I’m so old, I can talk about, you know, the solar business, you know, 20/15 years ago. The reduction in the cost of photovoltaic solar energy has exceeded the predictions of the most wildly optimistic people a decade ago, I mean, absolutely. No-one – you know, the – it’s just, it’s not – the cost curve has come down so steeply and the – and so, the biggest single element in the cost of making green hydrogen is obviously the cost of the electricity, and that continues to plummet. So, you know, I think, you know, the challenge we’re going to have in the green energy – you know, energy transformation business, is storage and transport of the energy and that’s – this is where green hydrogen appears.
Bernice Lee
I mean, there are lots and lots of perspectives being shared online, as well, here, which – and questions and I, kind of, want to bring a couple of slightly different perspectives in. One’s from Hamish Kinnear, who says that “There is potential in its fungibility, and this is promising, but one issue with green hydrogen is the water required to produce it. Water stress is increasing across the world and use of saltwater in water poor countries required energy intensive desalination, a process which,” he said, “produces waste in the form of brine and limited commercial application. How can this be dealt with?” Anyone care to look at that?
Dr Andrew Forrest
I’m very happy to. I’ve been desalinating now for 30 years at an industrial scale. We have analysed the cost of making a kilo of green hydrogen from seawater. It adds about half a cent. What I really love most about burning hydrogen is that it goes back to water and so, we never lose it out of the mass balance of water in the world. You can’t say that about oil and gas and, you know, what I love most about it is the energy sovereignty.
I mean, I’d like to pick up on Johannah’s point, but I don’t really understand here in Britain, I could understand it if we all lived in Russia, this deep loyalty you all have to President Putin and Russia, or – I’d understand if we lived in the Middle East why you’re so passionately economically defensive of Saudi Arabia and MBS. But I don’t really understand that you’d give your livelihoods to these gentlemen by staying stuck to fossil fuels, when you could free yourself and make all your energy here. I mean, we’ve just got to get this through to British homes and mums and dads and punters, so they can get it through to your Prime Minister that you’d much rather not prop up the poor, impoverished Saudis and Russians, but create the jobs and energy right here in Britain.
Bernice Lee
I mean, we – yeah, I think the energy and it’s – the energy security is obviously one of the important consideration, in general, and certainly in the case of the transition, a lot of security questions are being thrown up, and sometimes quite specifically. So, I have a question here from Stephen Andrews that says that “The biggest problem in the UK is the use of gas for domestic heating. Can sufficient green hydrogen be produced to meet the energy needs of domestic, as well as industrial uses?”
Malcolm Turnbull
Yes. Yeah, yeah, that’s true. That absolutely can, yeah. The – Marco Alverà, who runs the big Italian gas utility, Snam, has got a good book out recently called, I think, the – Hydrogen” or The Power of Hydrogen. And he goes through how hydrogen can, first, supplement, and then overtake natural gas in, you know, in a gas network, including a domestic gas network. So, yeah, so, it’s definitely doable.
Bernice Lee
I will – I may come back to you with more. Do we have any question? ‘Cause I feel like – ooh, okay, thank God for that, sorry. There are two, three. You didn’t raise your hand. Sorry, I thought that you were – to get my attention. So, I have three questions in the room. I thought you were being outdone by those online, which is, kind of, weird. Why don’t we start with the gentleman here, one, two, three, and we’ll – shall we take all three, or shall we take one-by-one? Well, let’s start with you, sir.
Vincent Champion
Thank you very much, it’s very interesting.
Bernice Lee
Please introduce yourself, as well.
Vincent Champion
My name is Vincent Champion. I’m a private member and a Journalist. I’ve got a question for Johannah, please. It’s interesting that Maersk seems to be looking at alternatives to hydrogen right now, alcohol-based, green fuel, ammonia. There’s a Danish startup called Blue Technologies, which you all know about. So, I’m not sure that Maersk is particularly focused on hydrogen. They’ve been investing in startups, which are – the latest one is someone that will use air capture, carbon capture, so – from the air, so CO2 capture from the air. So, I wondered if you could comment on that.
And the other thing, if I may ask Dr Fortescue, please, you’ll be aware that companies like JCB, and there’s a Belgian shipping technical offshoot called CMB. Tech, are looking at direct hydrogen injection into diesel plant, and their arg – the argument is that it helps preserve diesel skills around the world. So, you get the three to one energy advantage, energy density advantage that Mr Turnbull was talking about just now, but it’s not nearly as efficient as a fuel cell electric vehicle and you’re still stuck with the maintenance costs of diesel plant, as opposed to an electric driveline, which is much simpler. So, I just wondered what you…
Bernice Lee
Thank you, that’s great.
Vincent Champion
Oh, sorry.
Bernice Lee
I mean, I’m a little bit worried…
Vincent Champion
Sorry, I’m going on a bit.
Bernice Lee
…about getting down the rabbit hole of a debate about something I don’t understand, which may come, ‘cause we have a very illustrious panel. So, Johannah, please keep it on…
Johannah Christensen
Yes.
Bernice Lee
…my level.
Johannah Christensen
Yeah, very briefly. So, green hydrogen application in shipping is most likely to be in the form of ammonia, so ammonia as a liquid fuel that is most compatible with deep sea shipping. And so, that is one of the solutions that Maersk is looking at as a most likely, or a very likely long-run solution for shipping.
Bernice Lee
Great. Do you want to – quickly?
Dr Andrew Forrest
Ah, no, look, methanol and alcohol and the like are – you know, we should tinker with and explore, but if you want a massive production of molecules, which can store and generate energy, then it’s hydrogen, and it’s – and strangely, you get more hydrogen molecules in a cubic metre of ammonia than you do in a cubic metre of hydrogen because of the gravity impact of the larger molecule of nitrogen compresses the hydrogen molecules. So, ammonia’s a really efficient vector and burns slowly, so it’s great for shipping.
Bernice Lee
I suppose the – in fact, the heart of the question, as well, I think is about the importance of, you know, people making the same choices to get to scale, in some ways. Because if you make separate choices, then it does complicate the question and I think that, for me, is the heart – the spirit of the question. I think I would like to bring more representative in the room in, this gentleman at the front, as well, please.
Austin Short
Hi, my name’s Austin Short. So, I just completed a masters in energy and sustainability at the University of Southampton, and that – thank you for agreeing to appear in person. It’s – I’m enjoying the novelty of it. So, my question is to do with the mining sector. To what extent do you think there’s a benefit that green hydrogen can be produced onsite? Whereas you mentioned diesel and great quantities of it for mining, away from civilisation, must have to be transported quite a distance in difficult situations. So, how – do you think it will help the economics and increase the uptake, the fact that you can generate the green hydrogen locally?
Dr Andrew Forrest
Look, I really don’t. The beauty of hydrogen is you can produce it locally, but you don’t have to find a big gas reservoir, oil reservoir somewhere in the world and then dig it out, burn – and burn the Earth. You can actually turn the sunlight, with a bit of water, straight into hydrogen. So, I think it is a massive advantage. Now, that’s not being pursued aggressively yet by my colleagues. Vale, no, BHP, no. Rio Tinto, yes. Rio Tinto were no and they’re now saying, “Actually, we’re going to be 50% down carbon emissions by 2030.” Suddenly, I’m not so crazy saying 100% down, ‘cause Rio is coming straight up behind us, and they’ll put in very big wind and solar farms and, I don’t know their exact process flowsheet, but I’m sure hydrogen will be part of it, as will direct electrification, onsite. Saving the world hundreds of millions of litres of diesel, if not billions.
Bernice Lee
Great. I mean – so, I’ve got two more questions here and a couple more online that I would like to bring in before we wrap. So, I’m going to try and hope that the gentleman here at the back and then the one – and there are two there, so there are three questions here. So, I’m going to ask you all to be quick and ask a question and try to refrain from long statements for now, so that we can get the best out of it for our panellists, as well. Please.
Patrick Kelly
It should be fairly straightforward in my case. Patrick Kelly, I’m a private member. I’d be very interested in your views on hydrogen in the mobility or the road transport sector. We talked a lot about shipping and steel and heavy manufacturing, so be grateful for your thoughts.
Bernice Lee
Not bad. Let’s see, gentleman here and then a gentleman over there, as well, I think.
Marcos
I’m Marcos, I’m a member. My question is how quickly we can scale the hydrogen production globally?
Bernice Lee
But wait, I usually – no, I usually encourage our members to tell us what you do, as well, not just the fact that you’re one of our members. But, you know, if you don’t mind. I should’ve said this earlier, but sorry, please repeat it.
Dr Andrew Forrest
Okay, can I just answer…
Bernice Lee
Yeah.
Dr Andrew Forrest
…this one question just very quickly? Small mobility-like cars, it’s coming. It’s called a hydrogen fuel cell. Governments have been savagely, and I say by your hip pocket – your taxes, savagely distracted by batteries only. That pulls out of the grid whatever’s in the grid, which in Britain’s case, and everyone else’s, is dirty. Shoves it into a car and the emissions don’t appear in the car, but they go straight up the spout, somewhere else. So, I think batteries have a really serious role to play, provided it’s combined with green hydrogen. Now, you’ve got a hydrogen fuel cell, you can drive a million kilometres, without one molecule of carbon being emitted. That’s the only way to have zero carbon driving.
Patrick Kelly
And what do you [inaudible – 59:58] where are you on the making of the efficiency for batteries in the battery electric vehicles, the conversion ratio?
Dr Andrew Forrest
I think – look, conversion from, say, oil in the ground, through to petrol you put in your car, is tremendously inefficient. From sunlight, to water, to hydrogen is a little bit more efficient, like 30 or 40%, so, it compares extremely well. For the energy conversion, with a hydrogen fuel cell, nothing can match it, it’s nearly perfect.
Patrick Kelly
Compared to battery electric, you’re saying?
Dr Andrew Forrest
Yes, because you are completely circular and you are no carbon, so your true cost is not external. You’re hitting yourself and you’re dropping it onto everyone else’s kids.
Bernice Lee
Well, great. I’ve a question here that I thought may be quite a nice one to have before I ask you all to give your final comments, and I may go the other way round, starting with Malcolm and then Johannah, then Andrew, maybe. So, the last question I have here, that I’d like to, sort of, throw into the mix for you to think about wrapping is that “It’s great to hear” – it’s from Eddie Rich, “to hear this vision for green hydrogen. Well done,” he says, “for getting on, but being inherently green, how can we actually be sure that it is green? Can you help make sure that all your renewable energy sources for green hydropower are certified against good environmental and social standards?” I think this is the Eddie Rich who may be the International…
Malcolm Turnbull
It is.
Bernice Lee
…yeah, Hydropower Association Head.
Malcolm Turnbull
Yeah.
Bernice Lee
So, it’s not surprising he’s asking this question. So, let me throw this into the mix for you, certification.
Malcolm Turnbull
Well, I can…
Bernice Lee
Good standards.
Malcolm Turnbull
…answer that. The – hydropower has had a bad rap, right, from you know, dams collapsing, to you know, ecosystems being flooded, villages being flooded. And the industry has adopted a new sustainability standard, the San Jose Declaration and, basically, any new hydropower is going to have to conform with that. But the interesting new player on the hydropower – well, it’s actually an old player, to be honest, but it’s become new again, is pumped storage. So, you know, the thing about variable renewable energy is that it is variable, and you get times in the day when you get, you know, a huge – much more energy than you’ve got demand for. So, what do you do with it? Well, make green hydrogen with it. You can also charge a battery. You can also pump water uphill and run it downhill, you know, when energy is – demand.
I mean, you know, in achieving this transformation to save the planet, we’ve got to tick all the – all the zero emission boxes can be ticked. But there are definitely some things, and shipping is the classic example, that only green hydrogen – in reality, you know, and in the form of ammonia, but ammo – you know, ammonia’s nitrogen and hydrogen, so there’s plenty of nitrogen around, so – to say the least. So, the issue is, you know, that sustainability is key with all of it. And, I mean, Andrew’s, you know, commitment to sustainability, not just in a straightforward ecological sense, but also in terms of no slavery and, you know, sort of, not exploiting people, so social sustainability, as well as ecological sustainability, is absolutely key.
Bernice Lee
Yeah, we have to do it all is the truth.
Malcolm Turnbull
Yeah, we do.
Bernice Lee
Johannah.
Johannah Christensen
Yeah, and that’s – I think that’s a really good point. I think in shipping, certainly, we’re still in the phase where there are multiple solutions in the mix. Some of them – I think the timescales matter. So, when Maersk goes out and makes a commitment to some methanol run chips, it’s because it’s something that can do in – until other solutions emerge and become viable. And what’s exciting about Andrew’s work is that he’s changing that timescale and compressing that timescale, right? So, that’s what’s exciting for us and why we’re so happy to be working together on this.
Bernice Lee
Andrew?
Dr Andrew Forrest
I think my colleagues have said it. I’m happy to answer another question. I think they’ve answered it really well.
Bernice Lee
Okay. I mean, you – I mean, I think that your – any parting thoughts for us?
Dr Andrew Forrest
Yeah, and look, my – it’s – I think it’s aligned to a British audience. I would be asking, if I were British, I’m certainly asking as an Australian, that we get on with it and we stop being so – we stop having such confused debate about what colour hydrogen it’s going to be. If we could just simply accept if it’s not green, it’s dirty and stop all the debate and all the rubbish, because you know it’s a real issue if a sector is saying, “We think carbon sequestration works and even better, we think you taxpayers should pay for it.” Well, now we have a big problem and that’s what the British Government is doing, that’s what the Australian Government is doing. And I’m just saying that’s failed and failed and failed and can we just now move on? We have a practical, implementable solution, it’s called green hydrogen. Let’s get on with it.
Bernice Lee
Well, with that, I mean, I didn’t want to confess earlier on that I actually came in here relatively sceptical and so, I, kind of, feel this certainly has piqued my interest enough and I feel that it – I have to take it very seriously, as a very serious solution. And like many of you, probably, we’re – and many of us will be heading up to COP26 shortly and it will be interesting to see how much of the signalling on this will come. I mean, we know that it’s not really directly in the text, probably, but nonetheless, it will be part of the mix and it will be very interesting to see the kind of signals that will come from COP26, in terms of alternative energy for the future and where green hydrogen will fit in, as well. And with this passion and vision and, also, the supply and the demand side all presented and, also, the political side, as well, of the transition.
We certainly hope that, for all our sake, that we have more options, and it sounds like that this is as good a bet as many others, especially as it built on, obviously, the revolution in renewable energy that actually could also be extraordinarily important for any future solutions, in general. And as our audience pointed out, whether it’s for transportation, from – you know, for mobility, for storage, etc., you know, it hopefully, isn’t just round the corner, but that is something that one could be embracing soon enough.
And with that, let me thank you all for being here today and for those of us who are lucky enough to be in person gathering, there’s a lunch upstairs, as well, in the Neill Malcolm Room, which we can also debate more. And I just should also add that I have been a little bit less forthcoming with all of you with some of the more scientific questions on the list, and now that you’ve – I’ve – you know, you’ve gauged – you know, you know our panellists, so feel free to give them all those seriously techy question. It would be my recommendation. So, please harangue them with all of that upstairs. Thank you very much, everyone. Please join in thanking [applause].
