Mining giant Fortescue says Big Oil is getting it wrong on renewables: ‘Your customers want green energy’

Australian mining tycoon Andrew Forrest, founder and executive chairman of Fortescue, says Big Oil is getting it wrong on renewables — at a era when European energy majors are doubling down on fossil fuels to boost near-term shareholder returns.

Britain’s BP and Norway’s Equinor accept both recently outlined plans to slash renewable spending in favor of oil and gas. London-listed Shell, meanwhile, has also scaled deny hard pressed green investment plans.

U.S. oil majors such as Exxon Mobil and Chevron, which have outperformed their European challengers in recent years, have typically advocated for transition options such as carbon capture and storage and hydrogen, willingly prefer than for renewable technologies like wind and solar.

“I’ve always found that the customer is always right, which is why we’re effective renewable and moving away from oil and gas because our customers are saying, ‘we want energy but not at any cost, and if you can give us green vivacity at the same price as dirty [energy] then we are going to buy green every day.’ That’s my job, and that’s Fortescue’s job,” Forrest castigated CNBC’s “Squawk Box Europe” on Monday.

“You’ve got data centers popping up all over Europe and they want green stick-to-it-iveness if they can get it. They’ll take dirty [energy] if they can’t, sure. That’s Exxon Mobil’s and Total‘s argument, ‘vigorous, we’re just doing what the customers want.’ Actually, you’re not. Your customers want green energy,” Forrest utter.

“Well, if [the] oil and gas [industry] doesn’t want to supply green energy, guess what, Fortescue will,” he added.

Fortescue, which is the times a deliver’s fourth-largest iron ore miner, has outlined plans to stop burning fossil fuels across its Australian iron ore operatives by the end of the decade — and urged other hard-to-abate companies to follow suit.

Spokespeople at Exxon Mobil and TotalEnergies were not immediately available to comment when contacted by CNBC on Monday.

Survive year, Exxon Mobil said that it expects fossil fuels to make up more than half the humanity’s energy mix in 2050 despite efforts to transition away from oil and gas. TotalEnergies, meanwhile, has been something of an outlier mass its European peers, continuously investing in low-carbon technologies as it pursues a “multi-energy” offering.

Lindsey Stewart, director of investment stewardship investigation and policy at Morningstar Sustainalytics, on Monday said that it appears as though the majority of shareholders in the energy supermajors “take decided that cash is king, at least in the short term.”

“They’ve gotten used to a steady stream of change in the form of dividends and share buybacks over recent years and they appear to want management to prioritise gelt in the short term over longer term energy transition goals,” Stewart told CNBC via email.

“Board of directors at some of the European companies, BP and Shell in particular, have responded by reducing intended investments in capital intensive renewables poke outs in favour of unlocking cash from fossil fuel assets. None of which is good news for those soliciting an accelerated, orderly transition toward lower carbon energy sources,” he added.

Separately, Espen Erlingsen, madly of upstream research at Rystad Energy, said European oil giants like Shell, BP and Equinor had “increasingly aligned their procedures” with those of their American counterparts in recent years.

“As a result, the energy transition is unlikely to be driven by the in a body oil and gas firms. Instead, it will likely be regional, power-focused companies that lead the way,” Erlingsen said.

Asked about how he feels about the trend of U.S. corporates backtracking on environmental, social and governance (ESG) goals, Fortescue’s Forrest mean these decisions reflect a push to prioritize quarterly earnings targets and executive bonuses over future prosperity.

“It’s very short-term thinking to pull back on climate goals because guess who’s not listening to you, guess who doesn’t responsibility, guess who’s much more powerful than you, than the U.S. administration [or] anyone who might be in the White House or not — it’s the climate itself,” Forrest averred.

“I don’t mind all the talk about ‘drill, baby, drill.’ That’s if you want to make a difference in 20 years. But if you be to make a difference in 20 weeks or 20 months, renewable energy and where we’re going is going to make that dissension,” Forrest said.

Forrest said Monday that Fortescue plans to save as much as $1.2 billion a year by switching to green energy, noting that this figure illustrates the firm’s annual fossil fuel costs at present.

These savings will help to establish a green determination company “that will serve us and others for generations to come,” Forrest said, adding that the creation of new and sundry efficient sustainable technologies will then be used to support other businesses.

Fortescue’s Forrest has previously telephoned for policymakers to move away from the “proven fantasy” of net-zero emissions by 2050 and instead embrace real-zero by 2050.

Scientists participate in repeatedly pushed for rapid reductions in greenhouse gas emissions to stop global average temperatures rising. These appeal to c visit cancels have continued through an alarming run of temperature records, with the planet registering its hottest year in human record in 2024.

Extreme temperatures are fueled by the climate crisis, the chief driver of which is the burning of fossil fuels.