FFI to support Indonesian steel giant on path to decarbonisation


Monday, 14 November, 2022

FFI to support Indonesian steel giant on path to decarbonisation

Fortescue Future Industries (FFI) has announced that it will partner with PT Gunung Raja Paksi Tbk (GRP) — a member of Gunung Steel Group and one of the largest steelmakers in Indonesia — to investigate how green hydrogen and green ammonia supplied by FFI could be used to help decarbonise GRP’s steelmaking factories. The use of green hydrogen could allow GRP to produce low-emission steel in what is a particularly hard-to-abate sector.

Andrew Forrest and GRP Member of the Executive Committee Kimin Tanoto have signed a memorandum of understanding (MOU) at the G20 Summit in Bali, Indonesia.

Under the MOU, the companies will seek to identify mutually beneficial opportunities to collaborate on green hydrogen and/or green ammonia technology and implementation, as well as offtake opportunities.

They plan to launch a Technical Feasibility Study to explore opportunities to use green hydrogen and/or green ammonia as an alternative fuel source to transform the upstream steelmaking process, which includes direct reduced iron (DRI) and hot briquetted iron (HBI), as well as the modification of the existing and future steelmaking process at GRP’s steel-making plant at Bekasi, in West Java.

“Fortescue is the only major heavy industry company in the world with a real construction plan to get to real zero and we are already rapidly beginning to acquire and implement the technology required to deliver on our 2030 decarbonisation target,” Forrest said. “If we are to have the impact needed to reduce carbon emissions, we cannot do this alone.

“We need other emitters — companies like GRP — to follow our lead, and we are determined to do everything in our power to help them on their own path to decarbonisation.”

A taskforce featuring employees from both companies will start work immediately following the signing of the MOU with a view to signing a binding a framework agreement in due course.

Tanoto said GRP was determined to seek out technologies that could help lower its carbon footprint.

“As leaders in the steelmaking industry, it is our responsibility to ensure that the steps we take today build a future for tomorrow,” he said. “We are working with partners who have the expertise to drive our business and the steel industry to a prosperous and environmentally friendly future.

“With that in mind, GRP is committed to leveraging the right technologies, knowledge and expertise to incorporate sustainability initiatives alongside business processes, which would make our sustainability strategy more viable in the long term.”

Muhammad Yusrizki, Chief of Kadin Net Zero Hub (Indonesian Chamber of Commerce and Industry), said: “Currently, we are witnessing Indonesia steel companies like GRP being on track to achieving net zero by having cooperation with FFI on green hydrogen usage.

“Such a great ambition like this should be responded to with policies to create an enabling ecosystem, such as a robust carbon tax and incentives. We hope that this MOU will pave the way for future partnerships with more industry players to build a low carbon industry ecosystem for the next generations in Indonesia.”

The volume of green energy supplied to GRP by FFI will be determined through the Technical Feasibility Study. This GH2 is likely to come from some of FFI’s first projects in Australia.

Image credit: iStock.com/photllurg

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