This week, Fortescue (ASX:FMG) produced its own hydrogen for the first time. What does this mean?

What's the lowdown of the company's latest milestone achievement?

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The Fortescue Metals Group Limited (ASX: FMG) share price has continued it accent in recent times, following positive investor sentiment.

This week, the mining outfit delivered news regarding a breakthrough achievement for its green offshoot, Fortescue Future Industries (FFI).

At Thursday's market close, the iron ore producer's shares dipped by 1.44% to $19.16 apiece.

male worker in hi-vis checking the balance of the hydrogen tanks

Image source: Getty Images

Fortescue Future Industries make progress

According to its media release, Fortescue Future Industries surpassed a milestone target in its quest into the green hydrogen industry.

The global green energy and product company announced it has designed and built its own electrolyser to produce renewable hydrogen.

A small team from Fortescue Future Industries' manufacturing arm developed the innovative electrolyser in their Western Australia facility. This is the first time the company has been able to create industrial grade hydrogen.

Fortescue Future Industries is aiming to produce 15 million tonnes of green hydrogen annually by 2030. 

Currently, the company is in the process of installing solar panels at its Dawson Road facility. Once complete, the electrolyser will be able to produce green hydrogen from solar electricity in 2022.

A pressurized alkaline system had been used to generate the hydrogen. The hydrogen gas management system is now fully operational and will be used to test all of the company's prototypes and concepts.

Fortescue Future Industries CEO, Julie Shuttleworth commented:

This is another outstanding achievement from our FFI in-house scientists and engineers – who are continuing to break new ground. The FFI team has designed and operated our own electrolyser system which will be key to developing FFI's green hydrogen production into the future.

Fortescue Future Industries chair, Dr Andrew Forrest added:

This electrolyser was internally designed, built and commissioned by a small, dedicated team of experts – an impressive achievement that is representative of the hard work that is happening across the whole of FFI.

The team spent thousands of hours on this project, facing setbacks along the way, but they pushed forward and managed to produce hydrogen before their stretch target date.

Fortescue share price snapshot

Up until the end of July, Fortescue shareholders were enjoying strong gains, hitting an all-time high of $26.58 apiece. That all came crashing down in the following months, with its shares touching a low of $13.90 in early October.

Since then, its shares have rebounded to around the half-way levels achieved in the first half of 2021.

On valuation metrics, Fortescue commands a market capitalisation of roughly $58.99 billion and has approximately 3.08 billion shares on issue.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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