Will the Fortescue (ASX:FMG) share price fly as it links up with Airbus?

Airbus and Fortescue are going to work on decarbonisation together.

| More on:
A green-caped superhero reveals their identity with a big dollar sign on their chest.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Fortescue share price will be under scrutiny after announcing a partnership with Airbus
  • FFI and Airbus are looking at how green hydrogen could decarbonise the aviation industry
  • The aim is to produce a green hydrogen-based aircraft by 2035

The Fortescue Metals Group Limited (ASX: FMG) share price is in focus after the company announced it is working with Airbus on decarbonisation.

Fortescue Future Industries (FFI) is on a mission to try to decarbonise heavy industry where it’s hard to reduce emissions.

Airbus is one of the biggest aircraft makers in the world.

FFI and Airbus are aiming to help decarbonise the aviation industry with zero-emission green hydrogen.

What’s the decarbonisation idea?

Fortescue Future Industries is looking to become a world-leading producer of green hydrogen. This is where hydrogen is made from water using 100% renewable electricity. It expects to be able to produce an increasing amount of green hydrogen in the coming years.

Airbus and FFI aim to leverage their respective expertise to support an entry-into-service of a green hydrogen-based aircraft by 2035.

They have signed a memorandum of understanding which will allow both companies to collaborate closely, as one focused taskforce, to implement green hydrogen as a fuel within the aviation industry.

What are some of the challenges?

Fortescue Future Industries and Airbus will be looking at some of the challenges surrounding green hydrogen including regulations, infrastructure and global supply chains. This ranges from the production of green hydrogen, all the way to the delivery to airports and transfer onto aircraft.

It was revealed that, under the signed memorandum of understanding, FFI will provide cost outlook and technology drivers on the various elements of the supply chain and will build infrastructure deployment scenarios for the supply of green hydrogen to targeted airports. Airbus will provide characteristics on fleet energy usage, scenarios for hydrogen demand in aviation, refuelling specifications and aviation regulatory framework.

Leadership commentary

The FFI founder and Chair Dr Andrew Forrest points out that the global aviation industry accounts for more than 2.5% of global carbon dioxide emissions. Those emissions have doubled since the 1980s.

Dr Forrest said:

The time is now for a green revolution in the aviation industry. This exciting collaboration brings together leaders in the aviation industry with leaders in green energy for a pollution-free future.

We are all citizens of a global world. People want to travel, reunite with family and friends and explore new places without being forced to pollute the planet. The problem isn’t travel, the problem is how we fuel our planes and ships – all of that must turn emissions free. No greenwash, no mirage, just 100% green.

FFI also included a quote from the Airbus Vice President of Zero Emissions Aircraft Glenn Llewellyn:

Airbus has identified green hydrogen as the most promising option for decarbonisation to meet our environmental challenges. You heard it here first: We are starting the green aviation revolution.

Fortescue share price snapshot

Since the start of 2022, Fortescue shares are down 6%.

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group Limited. 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.

More on Resources Shares

A woman is excited as she reads the latest rumour on her phone.
Resources Shares

Obscure ASX mining share surges 29% following OZ Minerals copper deal update

Shareholders are set to vote on the proposal later this month.

Read more »

A futuristic view of electric vehicle technology with speeding bright light trails indicating power.
Resources Shares

New records and looming deficits. Why ASX lithium stocks are in the spotlight

Demand for lithium is booming alongside rocketing growth in EV production, sending the price of the battery critical metal up…

Read more »

Female worker sitting desk with head in hand and looking fed up
Resources Shares

Can the iron ore price regain its March highs in 2022?

Opinion is mixed on the outlook for the commodity.

Read more »

Young woman using computer laptop with hand on chin thinking about question, pensive expression.
Resources Shares

Down 20% in 6 months, what’s next for the BHP share price?

It’s been tricky for BHP shareholders recently. Can things turnaround?

Read more »

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Share Gainers

Here are 2 ASX lithium shares surging on new discoveries

Demand for lithium continues to see high realised spot prices, with a positive flow-on effect to ASX lithium stocks.

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Resources Shares

Up 80% in a month, why is the Province Resources share price on ice today?

What's going on with the minerals producer’s stock? We take a closer look.

Read more »

A miner reacts to a positive company report mobile phone representing rising iron ore price
Resources Shares

Guess which ASX mining share is rocketing 55% on a new lithium find

Ragusa Minerals is getting ready for its maiden drilling program at its NT Lithium Project.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Still down in 2022, is the Fortescue share price now on the road to recovery?

Let's see what the consensus amongst analyst is.

Read more »