Fortescue Backs Off Green Hydrogen in Arizona and Gladstone to Refocus on Iron Ore Strength

Fortescue is hitting the brakes on two of its early-stage green hydrogen projects—one in Arizona and the other in Gladstone, Australia—as it shifts focus back to its bread and butter: iron ore mining. After taking a hard look at its clean energy efforts, the company’s pulling back, expecting to write down around $150 million (pre-tax) in the process. The reason? The financial returns just aren’t adding up right now, and the market still feels a bit too green, in more ways than one.

Gladstone’s PEM50 Project Hits Pause

One of the biggest players in this pivot is the PEM50 Project in Gladstone. Powered by renewable energy, it was designed to produce zero-carbon hydrogen via PEM electrolyzers. It was all part of a bigger push by Fortescue Future Industries to carve out a serious space in the clean energy world. But between ballooning costs and a tough commercial path, the company made the call to regroup and tighten things up.

This Isn’t a Full Exit—Just a Strategic Reset

Let’s be clear—this isn’t Fortescue throwing in the towel on green hydrogen. Far from it. The company is still moving ahead with other projects in places like Brazil, Argentina, and Norway. But for now, the priority is clear: double down on what’s delivering—namely, iron ore. And fiscal 2025 has already delivered some good news on that front, with record-breaking ore shipments reinforcing the company’s focus on profitability in the near term.

The Local Fallout—and What’s Next

Of course, stepping away from these projects isn’t without consequences. Planned infrastructure and job opportunities tied to the Arizona hydrogen project and Gladstone development may now be delayed—or scrapped altogether. However, Fortescue isn’t walking away from the sites entirely. It’s exploring ways to repurpose existing assets, potentially keeping some local momentum alive.

Green Hydrogen’s Growing Pains

What this really shows is that the road to a zero-emission future isn’t all sunshine and subsidies. Developing green hydrogen at scale is still a major challenge, especially when the economics don’t yet stack up the way traditional resources do. Fortescue’s move highlights the tough calls companies have to make in balancing climate ambition with commercial reality—and it’s a reminder that even big names need to keep their feet on the ground while reaching for a greener horizon.