Fortescue Metals Group Ltd., the world’s No. 4 iron ore producer and a major greenhouse gas emitter, is ending its use of voluntary carbon offsets.
Billionaire Andrew Forrest’s company, which generated 2.55 million tons of scope 1 and 2 carbon dioxide pollution in the 12 months to June 30, confirmed it has begun implementing a policy to end the purchase of credits from the current financial year.
“We are the only heavy emitter in the world to stop purchasing voluntary offsets,” Dino Otranto, chief executive officer of Fortescue’s metals business, said in a statement. Offsets have been beset by questions over their quality and ability to deliver genuine reductions in emissions, the miner said in an annual report last month.
Global offsets are under increasing scrutiny amid concerns about their ability to help efforts to limit planetary warming. Even so, the voluntary carbon market is forecast to grow from about $2 billion currently to potentially as high as $953 billion by 2037, according to BloombergNEF.
Perth-based Fortescue — under pressure over the departures of a series of executives — spent $6.2 million in fiscal 2023 on voluntary offsets and surrendered a total of 336,833 tons of credits, according to the annual report.
Fortescue is aiming to eliminate scope 1 and 2 emissions — those directly linked to a company’s operations — by 2030, and to end the use of fossil fuels at its Australian iron ore sites. Those emissions are in line with some of Australia’s major energy producers, including the local units of Shell Plc and Exxon Mobil Corp.
