Fortescue Metals Group Ltd (ASX: FMG) shares closed up 0.5% yesterday, trading for $25.94 apiece.
That was roughly in line with the 0.4% gains posted by the S&P/ASX 200 Index (ASX: XJO).
This came amid an overall positive reaction from investors to the new Federal budget.
And while Fortescue shares didn't widely outperform the benchmark index yesterday, the ASX 200 miner could catch sustained tailwinds from some of the spending measures unveiled by Treasurer Jim Chalmers.
Among those measures, the budget contains $6.7 billion in tax incentives for green hydrogen production and an additional $1.7 billion to spur innovation in producing green iron production along with low emissions fuels.
And Andrew Forest's Fortescue is leading its rivals in these sustainable ventures.
As the miner states on its website:
Fortescue is leading the green industrial revolution by developing the technologies to decarbonise hard-to-abate sectors (like our iron ore operations) while building a global portfolio of renewable energy projects.
We'll help our planet step beyond fossil fuels by harnessing the world's renewable energy resources to produce renewable electricity, green hydrogen, green ammonia and other green industrial products such as green iron.
How Fortescue shares are embracing green hydrogen
Green hydrogen, if you're not familiar, is produced by splitting the oxygen atoms from hydrogen atoms in water using sustainable energy sources like solar, wind or thermal.
Gray hydrogen, on the other hand, makes use of gas to split up water molecules.
Green iron, then, is iron produced using green hydrogen as an energy source.
And Fortescue shares already have a sizeable footprint in the green hydrogen space.
In November, the company reported it had approved a Final Investment Decision (FID) on its Phoenix Hydrogen Hub, located in the United States; its Gladstone PEM50 Project, located in Queensland; and its Green Iron Trial Commercial Plant, located in Western Australia.
Commenting on the FID decision and Fortescue's green iron ambitions at the time, CEO Dino Otranto said, "Fortescue is taking a proactive approach to green iron, including embracing innovative technologies that will help us step away from the use of fossil fuels."
When the ASX 200 miner reported its half-year results, Fortescue Energy CEO Mark Hutchinson said:
Over the half we also continued to make important progress across the four verticals now established within our Energy business – green energy production, battery technology development, hydrogen systems and capital.
And in April, Fortescue shares got a lift after the miner announced a joint venture with OCP Group.
Hutchinson noted:
The pipeline of green energy projects continues to develop, and Fortescue entered a landmark joint venture with OCP Group in Morocco which aims to supply green hydrogen and ammonia for use as sources of green energy and in the manufacture of carbon-neutral and customised fertilisers.
With Fortescue shares having gotten a head start over much of the competition in this space, the ASX 200 miner looks well-placed to benefit from the Federal budget's multi-billion-dollar green hydrogen and green iron tax incentives.