Green hydrogen for Covestro
Fortescue Future Industries (FFI), a global green energy and green industry company based in Australia, and Covestro, a German-based global leader in high-tech polymer materials, intend to enter into a long-term agreement for the supply of green hydrogen and its derivatives, including green ammonia.
According to the letter of intent, FFI and Covestro will work on a supply agreement under which FFI would supply Covestro with the equivalent of up to 100,000 metric tons of green hydrogen (GH2) per year. This agreement would allow Covestro to replace gray hydrogen and its derivatives with GH2, reducing its greenhouse gas emissions by up to 900,000 metric tons of CO2 per year. Deliveries are planned for production sites in Asia, North America and Europe and could begin in 2024.
By comparison, the German chemical industry needs just over one million metric tons of hydrogen annually, according to the industry association VCI, a position paper said in 2020. One ton of hydrogen has an energy content of around 33,000 kilowatt hours. grThe hydrogen is then to be produced from water using electrolysis. The electricity required for this is to be generated from renewable energy sources and transported by special ships.
For FFI and Covestro, the non-binding letter of intent is a first step toward a broader strategic partnership to accelerate the transition to green energy, especially in energy-intensive industries.
FFI Chairman Dr. Andrew Forrest AO said, “This is a groundbreaking collaboration that underscores the power green hydrogen has to accelerate the decarbonization of some of the world’s most energy-intensive industries. FFI and Covestro share the belief that green hydrogen and green ammonia will play a critical role in enabling companies to achieve their climate goals and prevent runaway global warming. We look forward to working with Covestro to meet its green hydrogen needs and to working with Germany to become the global leader in decarbonization, green hydrogen and ammonia.“
Dr. Markus Steilemann, CEO of Covestro, said, “We are pleased that FFI shares our vision of the circular economy and is willing to take bold steps to support the much-needed market ramp-up for green hydrogen. Our collaboration with FFI underscores our ambition to lead the way in building the circular economy and transitioning to carbon-neutral production. Green hydrogen and its derivatives play an important role for the chemical industry — both as an alternative feedstock and as a source of clean energy. Transitioning to the use of green hydrogen and its derivatives is an essential step in our efforts to provide more sustainable products that in turn reduce the carbon footprint of our customer industries.“
Julie Shuttleworth AM, chief executive officer of FFI, said, “Covestro is a global leader in its industry, with materials used in almost every aspect of modern life — for example, in the automotive, construction and electronics industries. This collaboration demonstrates once again that green hydrogen is a practical, easy-to-implement solution for numerous industries that are difficult to decarbonize.“
Green hydrogen is produced from renewable energy. Its production produces zero emissions because the only byproduct is steam. FFI’s goal is to increase green hydrogen production to 15 million tons per year by 2030. Production is then expected to rise to 50 million metric tons per year in the following decade.
Covestro uses hydrogen and its derivatives as a starting material for the production of high-performance polymers. As part of a broad-based circular economy strategy, Covestro has committed to rely entirely on alternative, renewable raw materials as well as green power. The partnership with FFI is an important milestone toward this goal.