The iron ore miner turned energy company slashed 700 jobs in a restructure on Wednesday, saying it would ensure the company remained "lean, impactful and agile".
Dr Forrest took to the airwaves on Thursday to explain the move and reassure investors he remained committed to a green energy future.
"We're not pulling back, this is something which I really genuinely believe in, I'm a hardcore bloke from the bush, I'm a miner, I'm a practical person, I've also had the good fortune to have an education in Australia, so I've really looked hard at the science," he told Perth radio station 6PR.
"I just know that going the way we're going with fossil fuels isn't an option, the climate is changing dramatically around us.
"It's been taken as 'Twiggy is walking back from hydrogen'.
Fortescue boss Andrew Forrest during a hydrogen announcement on Gibson Island in Brisbane. (Darren England/AAP PHOTOS)
"Twiggy is not walking back from hydrogen. The world has to have it. We just have to work out how to produce it cheaply enough."
The billionaire philanthropist said the uncertainty created by the wars in Ukraine and Gaza and high costs had made the operating environment tough.
"We need lower power prices, hydrogen is directly a function of the electricity cost - if the electricity cost is high, then we can't make hydrogen cheaply enough to compete with fossil fuels," he said.
He said the 700 jobs were being cut to reduce duplication of roles across the business and lower costs.
Dr Forrest said they included white-collar jobs in the communities, human resources and government relations departments.
"Our organisation had been simplified down into one, from having management layers everywhere, we're down to three
He said the job losses had left him "gutted like a fish with a blunt knife, mate".
"We're up around 15,000 people ... 5000 contractors. We've let 700 people go. I just hate doing it."
Opposition spokesman Ted O'Brien says Australia's energy security is under threat. (Steven Markham/AAP PHOTOS)
Opposition spokesman for climate change and energy Ted O'Brien said Fortescue was abandoning its green hydrogen strategy and it had "blown a gaping hole" in the federal government's energy plan.
"The collapse of this project is symptomatic of Labor's failing all-eggs-in-one-basket renewables-only plan which is eating away at Australia's energy future," he said.
"Labor thinks it's picking winners, but we now know they are picking losers and it's Australian taxpayers who are picking up the bill."
Mr O'Brien said the nation's energy security was under threat.
"If increasing gas supply was critical yesterday it is absolutely essential today as the hopes that green hydrogen can play a role in supporting supply fades," he said.
Prime Minister Anthony Albanese said the nation's energy plan remained on track.Â
"We want to make sure that we deliver the clean energy that Australia needs and that when coal-fired power stations closed, as they've announced their closure," he said.
"That's why we need a real plan that's fully costed and that's being rolled out with the certainty being provided for investment.
Climate Change and Energy Minister Chris Bowen said more than 50 companies were working on renewable hydrogen projects across the nation, with a value in excess of $225 billion.
"Green hydrogen will be one of the best ways Australia can decarbonise domestic heavy emitters and help develop robust low carbon manufacturing and industry," he said.
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