BHP today announced a five-year, US$400m Climate Investment Program to develop technologies to reduce emissions from its own operations as well as those generated from the use of its resources.
BHP CEO Andrew Mackenzie said: “Over the next five years this program will scale up low carbon technologies critical to the decarbonisation of our operations. It will drive investment in nature-based solutions and encourage further collective action on scope three emissions.”
“Commercial success of these investments will breed ambition and create more innovative partnerships to respond collectively to the climate challenge.”
No silver bullet for change
In his speech launching the BHP Climate investment program today, McKenzie said that there is no one simple ‘silver bullet’.
‘Renewables, nuclear, hydrogen, long-term storage of electricity, coal and gas with carbon capture and storage (CCS), negative emissions technologies like re-forestation and biomass with CCS, and other approaches will all contribute to lower carbon outcomes. Yet often to provide simple and sometimes self-serving answers, the contributions of any one solution can be exaggerated. Worse still, important trade-offs and unacceptable consequences, ignored.’
‘Electric vehicles for example, are considered to be lower carbon than internal combustion engines. But if the power is generated from fossil fuels the emissions are just moved up the chain.’
‘Electrification alone does not deliver the changes necessary to reduce emissions from transport. That requires the decarbonisation of the electricity supply.’
‘There are similar trade-offs associated with renewables. While renewables are powerful levers for decarbonisation they compete for land which could be used for agriculture and urbanisation, or for conservation and leisure’.
‘They produce more waste relative to some other sources of energy, and can cause local destruction of wildlife.’
‘Renewables, like batteries, also require more mined resources, which is good for us, but perhaps not for others.’
A considered an orderly transition
Mr Mackenzie added: “We must take a product stewardship role for emissions across our value chain and commit to working with shippers, processors and users of our products to reduce scope three emissions.”
Other measures announced today include:
- Establishing a new medium-term, science-based target for scope one and two emissions in line with the Paris Agreement. This is in addition to BHP’s short-term goal to cap 2022 emissions at 2017 levels, and the long-term goal of net-zero emissions by mid-century.
- Developing a new climate portfolio analysis report in 2020, following on from BHP’s 2015 two degrees scenario analysis. This new report will evaluate the potential impacts of a broader range of scenarios and a transition to a ‘well below’ two-degree world.
- Strengthening the link between emissions performance and executive remuneration. From 2021, this link will be clarified to further reinforce the strategic importance and responsibility of reducing emissions as a business.
Mr Mackenzie concluded: “We require a considered and orderly transition to a lower-carbon world, in which resource companies like BHP have both critical expertise and a key role to play.”
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