MELBOURNE (REUTERS) – BHP Group will focus on cutting its operational emissions by 30 per cent by the 2030 financial year from 2020 levels, and will link executive bonuses to its progress, its chief executive said in a climate strategy update on Thursday (Sept 10).
The world’s biggest listed miner will focus on using cleaner forms of power supply as well as taking steps to electrify its diesel-powered truck fleet as part of steps that will eventually see it reach net zero operational emissions by 2050.
“We are… realistic about the magnitude of the task that the world faces in meeting the Paris goals,” CEO Mike Henry said.
“Unfortunately, today the world is not currently on track… The world will need to increase action if it is to achieve the ambitions of Paris.”
Under the 2015 Paris Climate Agreement, nearly 200 nations agreed to limit global warming to well below 2 deg C and ideally 1.5 deg C, deeming that anything above these levels would put people and livelihoods at tremendous risk. Achieving this would mean making deep cuts to fossil fuel emissions.
BHP said it will work with the steel and maritime industries, both among the world’s most heavily polluting, to develop ways to cut emissions intensity, by 30 per cent for the steel industry and by 40 per cent for BHP-chartered shipping.
“We expect our actions to catalyse broader emissions reductions throughout the steel and maritime sectors,” Mr Henry said, adding that 10 per cent of short-term incentives for the executive leadership team will be linked to the firm’s climate change progress.
BHP’s operational emissions last financial year stood at 14.2 million tonnes of carbon dioxide (CO2) equivalent, around half of peer Rio Tinto at 26.4 million tonnes, according to investor group Market Forces.
Its scope three emissions, or those of its customers, however, at 566.8 million tonnes are bigger than Australia’s total national emissions for the year to December 2019 of 532.5 million tonnes, Market Forces said.
“BHP has set the bar for its diversified mining competitors,” its executive director Julien Vincent said, pointing to Rio Tinto’s target to reduce its operational emissions to 15 per cent below 2018 levels by 2030.
“However, setting the bar at 30 per cent below 2020 levels by 2030 is clearly choosing to fall short of the Paris Agreement… This limit has been supported by investors worth over US$37 trillion, not to mention the global community concerned for a liveable climate.”
BHP announced plans to divest some coal assets last month as it rebalances its portfolio towards commodities such as copper and nickel that it expects to be in greater demand in a lower carbon future. It reaffirmed its commitment to petroleum.
The miner has shaped its climate change plan according to four climate scenarios.
Its most extreme “Climate Crisis” scenario “involves an abandonment of existing global decarbonisation initiatives for a time, leading to a catastrophic climate crisis, which catalyses urgent subsequent decarbonisation”.
The others include maintaining a temperature rise of 1.5 deg C as per Paris goals; a “lower carbon view” based on rapid decarbonisation in easier to abate sectors; and a view of decarbonisation in some of the world’s more developed regions.
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