Fans of Fortescue Metals Group Limited (ASX: FMG) shares will likely be familiar with the company's green ambitions.
The iron ore giant unveiled a whole segment dedicated to green energy in general, and hydrogen in particular, in late 2021. The venture, dubbed Fortescue Future Industries (FFI), has commanded the attention of many market watchers since.
Meanwhile, expectations for hydrogen as an energy source have blasted off. Even the Australian government has joined in, putting aside $2 billion in the latest federal budget to accelerate the nation's capabilities.
And one S&P/ASX 200 Index (ASX: XJO) insider has illustrated just how much demand is out there. Let's take a look.
Surging demand for hydrogen could spell good news for FFI
Orica Ltd (ASX: ORI) chief development and sustainability officer Andrew Stewart has reportedly highlighted the popularity of hydrogen as a fuel source at the Australian Financial Review's ESG Summit, held in Sydney today.
He told the summit that Australian companies could be waiting two years for electrolysers – the technology that can create hydrogen from water – amid soaring demand, the publication reports.
That might be good news for Fortescue and, perhaps in turn, the company's shares.
FFI broke ground on its electrolyser manufacturing facility early last year. It's part of the Green Energy Manufacturing Centre being built in Gladstone.
It's expected to be the world's largest electrolyser facility, with an initial capacity of two gigawatts per annum.
FFI aims to produce 15 million tonnes of green hydrogen each year by 2030. It's also key to the iron ore miner's decarbonisation strategy.
However, hydrogen might not turn out to be all it's cracked up to be, according to the other iron ore giant.
BHP Group Ltd (ASX: BHP) head of energy, carbon, and technology analysis Lee Levkowitz recently said, as per The Australian, hydrogen "could be champagne or it could be tap water". She continued:
There are certainly opportunities in the global energy transition where it will be needed, but there are a variety of decarbonisation technologies where it is not necessarily the foremost technology.
Fortescue share price snapshot
Fortescue stock has been underperforming this year despite continued hype surrounding the company's green energy ambitions.
Right now, shares in the iron ore giant are trading flat year to date. They've also fallen 5% since this time last year.
For comparison, the ASX 200 has gained 4% since the start of 2023. Though, it hasn't gone anywhere over the last 12 months.
