Fortescue’s policy on carbon offsets has been to reluctantly buy them to offset emissions in circumstances where there is no option to curb the actual emissions, and the company has vowed to cease using offsets by 2030 under a plan to achieve “real zero” emissions rather than “net zero”.
But Ms Pendal said the company might start earning ACCUs.
“We also think there is a third potential opportunity as a consequence of the safeguards mechanism; looking at partnerships with new parties in a new lens, specifically the potential to partner around carbon farming and other opportunities where we may be part of a future high quality ACCU generation model,” she said.
Looking for an ‘edge’
Asked to elaborate on Fortescue’s plans to farm carbon or trade ACCUs, Ms Pendal said the company would not reveal commercially competitive information.
But she said the company was looking for an “edge” around carbon markets and was open-minded about the potential to be a partner on projects that earned carbon credits.
“Our ACCU strategy is not something I would talk about in this forum, in part because it is still forming, but also in part because we hope it will give us a bit of an edge so that is something we are pretty protective of,” she said.
“I am not privy to any particular decision which would see us become a carbon farmer, but what we definitely do have, is we have got a very open mind to any technology solution and partnership.
“That partnership piece, whether it is with traditional custodians for example, whether it could be with pastoralists for example, we are definitely open-minded to exploring those options.”
Dr Forrest said in September 2021 that some offsets were scams and companies should avoid using offsets as much as possible.
“If you’ve got absolutely nothing else, then certainly look at them, but make sure they’re very sincere because they can be unreliable, and there are scams in the offset industry,” he told the Good Will Hunters podcast.
Dr Forrest predicted in 2021 that carbon offsets would decline in popularity.
“We think offsets will become less and less popular as people realise how very unreliable they are,” he said.
Rio Tinto and BHP have both warned in the past year that they may need to rely on carbon offsets for a long time to meet their carbon reduction targets. Rio said it would rely heavily on them in the near future while low carbon technologies were proved up.
Ms Pendal told Thursday’s summit that Fortescue had formed a “very clear” view of which assets it could not continue operating past 2030 if it was going to meet its targets, and named diesel trucks and diesel-fired power generators.
Street Talk reported in May that Fortescue had hired Citi to review its Pilbara power assets with an expectation that some may be sold.
Ms Pendal said companies, governments and communities did not yet fully understand the supply chain constraints that would need to be resolved for the world to decarbonise.
She nominated challenges with importing wind turbine pylons through ports such as Port Hedland as an example of a logistical challenge that had to be overcome.
“Those ports are not equipped to import large-sized wind turbines for example, they are not built for long wind turbine columns and so we are starting to think about, and talk to the right folks about what is an alternate model for bringing in critical decarbonisation kit,” she said.