A Green Transition Won’t Be Led by Billionaires

Australian billionaire Andrew “Twiggy” Forrest has been hailed as a climate messiah for his pursuit of green energy. But his vision has nothing to do with improving human lives and shows why the green transition can’t be handled by the elite.

Australian billionaire Andrew Forrest, who markets himself as a climate savior, at a rugby match on August 17, 2018, in Perth, Australia. (Paul Kane / Getty Images)

The global financial press loves mining magnate Andrew “Twiggy” Forrest. Forrest is a brash Australian billionaire who has made great use of a heavily massaged rags-to-riches origin story. He commands the world’s fourth-biggest iron ore producer, and the attention of some of its most powerful people.

The media has been particularly fixated on Forrest lately. His high-profile divorce, a string of departures from senior executives at his Fortescue Metals Group, and rumored shareholder discontent over his mental state have set tongues wagging.

Much of the gossip has centered around setbacks to Fortescue’s green hydrogen projects. Some of the blame has fallen on his alleged environmental ideology. Last month an Australian media outlet produced a fawning contribution to the discussion, asking whether it was reasonable to call Forrest a “climate messiah.” It quoted an off-the-record Fortescue investor, who declared “I reckon he’s lost it. He genuinely thinks he’s the chosen one.”

Forrest’s supposed climate activism might seem like welcome news. Australia is the world’s third-largest fossil fuel exporter and has roughly 112 new coal and gas projects planned. It is currently experiencing a record-breaking spring heatwave, and has another horrendous season of catastrophic fires and floods looming. Ordinary Australians might be forgiven for thinking anything is better than nothing.

But Forrest’s participation in any global green turn is conditional on him residing at the profitable helm. It’s about market share, not human well-being. And unfortunately for the rest of us, he plans to ramp up the destructive contradictions of the present day, not break with them.

With Saviors Like These, Who Needs Enemies

Much has been made of Forrest’s humble origins. The Saturday Paper even recently wrote that,

his roots in the rusty dirt of the Pilbara have helped him build a reputation as the battler’s billionaire. . . . Unlike the leaders of his largest competitors in the Pilbara, Rio Tinto and BHP, Twiggy Forrest is reliably, and avowedly, of the place he is exploiting.

Forrest is indeed from Western Australia. But his family were part of the squattocracy — Australian landed gentry with large pastoral holdings worked by Aboriginal slave and semislave labor. His great-uncle was the state’s first premier: a gold rush–era power player whose antagonism of poor prospectors in favor of large mining companies helped shape the state’s uneasy federation and its secession-happy politics.

Forrest made his own fortune through Fortescue Metals Group. It broke an existing duopoly in the Pilbara region of Australia, selling enormous quantities of iron ore to China during its early twenty-first-century boom. This rise to prominence involved dispossessing the Yindjibarndi people, who never gave permission nor received compensation for Fortescue’s destruction of their lands. Their long list of grievances against Forrest are currently being heard by the courts.

While Fortescue has paid plenty in mining royalties over the past two decades, it has steadfastly fought any attempt to pay taxes proportionate to its superprofits. Fortescue was part of the group of mining companies that toppled Australian prime minister Kevin Rudd in 2011 in order to avoid paying windfall taxes. Shut out of the postcoup negotiations by his larger corporate rivals, Forrest later denied having anything to do with Rudd’s ousting. He was thus the only member of the coup gang to oppose even the largely symbolic tax brought in by the miners’ preferred prime minister, Julia Gillard.

Like all mining magnates in Australia, Forrest and Fortescue are capable of pragmatism when it comes to the labor movement. Forrest’s green hydrogen ambitions, for example, gel nicely with trade union demands for the expansion of manufacturing in Port Kembla — at least for now.

The deteriorating conditions at Fortescue’s Pilbara mining sites reveal a truer contempt. This scornful attitude was made very clear during the mining boom, a time of record profits for the company. When deckhands on the tugboats guiding iron-ore cargo ships out of Port Hedland demanded higher pay, the then-CEO of Fortescue declared that “we cannot stand by and watch our employees and our business suffer through the greed and self-interest of a few.” This is the topsy-turvy world of Andrew Forrest, where selflessness is hoarded superprofits, and greed is workers demanding a little more.

The Green Road to Damascus

Forrest’s former business partner in Far East Capital once boasted that Forrest “could sell ice to the eskimos.” Funnily enough, Forrest now credits the Yupik lands’ destruction as causing his green epiphany. During a near-death experience, he allegedly first learned about thawing Siberian permafrost and was converted to the green cause. Given Fortescue’s massive contribution to carbon emissions, such a conversion seems unlikely. More probable is that Forrest is chasing the next untapped market.

The International Renewable Energy Agency has predicted that by 2050, green hydrogen will make up a tenth of global energy use. Forrest is once again betting on Asia, and a future shift to renewable steel production in the Chinese market. He has already partnered with an Indonesian steelmaker to showcase green hydrogen for Chinese industry eyes.

Joe Biden’s Inflation Reduction Act (IRA) of 2022 represents a unique opportunity for energy capitalists like Forrest. It’s a chance to capture market share early — heavily subsidized by the public dollar. Forrest has already announced new factories and investments in right-to-work states, including Arizona, Michigan, and others. Fortescue has also used the IRA to try to wedge the Australian government into providing greater subsidies and tax breaks domestically.

The CEO of Fortescue Future Industries (FFI), the green wing of Forrest’s fossil fuel company, clarified that the green transition “is a massive opportunity for Australia actually to become almost the Saudi Arabia of the green energy world.” There are no prizes for guessing who the power would be behind any future green throne.

Skeptical Disciples

There are, however, several barriers to this vision being realized. The first is the short-sightedness of Fortescue investors, who are afraid of the too-speculative nature of the green hydrogen market. In a widely ridiculed moment, Forrest painted an apocalyptic picture of the future for a roomful of head-scratching shareholders, who “were left wondering how the information could be applied to valuing their shares.” Forrest can hardly blame his greedy investors: he himself forged Fortescue in a race for short-term profits at the expense of long-term vision.

Technical barriers are another obstacle. This can refer to issues with the safe transportation of green hydrogen, but more honestly refers to the fact that production costs have simply been too high for profitable private green hydrogen production. As with everything, capitalists want the green transition to run on socialized risk and privatized profit.

Environmental degradation is another barrier. Green hydrogen production involves an immense amount of water — which in these drought-stricken times authorities are reluctant to hand over. This is not because it isn’t available, but because it is guzzled at an insane rate by large agricultural interests. On this front Forrest’s hands are industrial-abattoir-scale bloody. He has extensive beef, aquaculture, and grain investments of more than half a billion through his personal company Tattarang. Forrest’s huge stake in Australia’s largest beef producer means he effectively controls more than 1 percent of Australia’s epic landmass. If anyone is to blame for water supply issues holding up green hydrogen negotiations, Forrest is.

“Out With the Old, in With Free Enterprise”

If there’s any aspect of the green transition which highlights the difference between Forrest’s vision and that of ordinary people, it’s the question of war and peace. Forrest sees the threat of armed conflict as hastening the green transition. His FFI CEO explained that the looming threat of war and “the geopolitical environment will only speed this up. Energy security is leading more and more countries to green energy solutions.”

This is not just wishful thinking. In March, Fortescue signed a memorandum of understanding to provide Germany with sufficient green hydrogen to replace a third of its Russian gas imports. It has, unsurprisingly, used the war in Ukraine to lobby the European Union to increase subsidies for its green hydrogen projects.

Forrest has also used Tattarang to seed the $25 billion dollar Ukraine Green Growth Initiative. This reconstruction fund will, in theory, rebuild Ukraine’s energy and communications infrastructure for a new green era. Forrest has spoken very explicitly about the war as shock therapy for the Ukrainian economy, explaining that

the war is acting like a massive cleansing mechanism. . . . [O]ut with the old — the Russian-imported oligarchical system — and in with free enterprise, technology, innovation and very, very motivated Ukrainian youth.

Closer to home, Forrest has become the dominant shareholder of defense shipbuilder Austal, which means he is set to profit from the military escalation of the AUKUS deal. But he’s also successfully avoided annoying Chinese officials too badly — his agricultural interests mostly escaped the recent restrictions placed by China on Australian exports.

To be fair, Forrest has warned that moves to war in the Asia-Pacific threaten economic danger. But even this is posed largely in terms of slowing down the transition to green hydrogen. And he is very open-minded about the economic rewards of rebuilding after a global conflagration, noting last year that “Someone with even the most meagre eye on history will see the economic miracles of South Korea, Japan and Germany after World War II.”

For someone so ready to take advantage of global turmoil, Forrest is keen to make sure his fossil fuel rivals do not. Speaking with Joe Biden and King Charles III in July, he urged them to declare

a global green armistice . . . that makes it illegal to take geopolitical considerations into account when producing and distributing the machines and technology the world needs to capture infinite zero-pollution renewable energy and distribute it around the world.

It’s a brazen image indeed: a billionaire in Buckingham Palace, dictating green transition terms that would outlaw his current rivals.

At the huge climate action rally in New York City last month, Representative Alexandria Ocasio-Cortez pointed a different way forward. She argued that the climate movement must demand that “not only will new energies be renewable, but they will be available as public, democratically controlled goods for our most vulnerable communities.”

The idea isn’t, she insisted, to replace oil barons with solar barons, leaving people behind. For Ocasio-Cortez, the transition will be about providing “better jobs” and “lower bills” while decarbonizing. Joe Biden’s ongoing “when I say climate, I think jobs” electoral pitch makes it clear: this is the world working people will throw their weight behind.

Andrew Forrest’s fantasy of a globe-straddling monopoly — in which he is a Saudi-style King Henry Ford — could not be more at odds with this shared vision of a better world.