A senior BHP executive has admitted the Australian multinational’s push to reduce emissions has been delayed as the Western Australian premier, Roger Cook, said big miners had an “important moral obligation” to decarbonise.
An exclusive investigation based on documents leaked to the Guardian and ABC revealed this week that the world’s biggest miner has hit the brakes on decarbonisation, something experts fear could put Australia’s national emissions reductions targets at risk.
The leaked documents show it has scrapped an iron ore processing plant that would have prevented 1.7m tonnes of emissions each year, the equivalent of removing 350,000 cars, while pushing back vast renewables projects, buying new polluting diesel fleets and war-gaming options to push critical climate investments into the next two decades.
It did so despite internal memos acknowledging that slow decarbonisation would have “reputational impacts” and that: “Urgent decarbonisation in line with BHP’s public commitments effectively underpins [WA iron ore’s] licence to operate, sustain and grow.”
On Wednesday, Tim Day, the head of BHP’s WA iron ore operations, acknowledged that its decarbonisation program had been delayed. He blamed significant obstacles to replacing the use of diesel – the biggest source of its emissions – due to what he said were slow advancements in electric trucking and rail technology.
He was unable to give any firm timeline for replacing diesel trucks.
“The timeframe will take what it takes to get the diesel replacement, but we see it, we’re testing now, we’ll keep going through it,” Day said, speaking at the Australian Financial Review’s mining summit.
“But it is delayed … we actually, we thought we’d be off diesel a little quicker, but that is delayed.”
Internal documents show BHP has considered options to start the transition as late as 2035 or 2040, despite acknowledging the delays could cause reputational damage and put its net zero by 2050 goal at risk.
Also speaking at the AFR’s conference, Cook, the WA premier, said decarbonisation by big miners was an “important moral obligation”.
“It’s an important part of mining companies maintaining their social licence to operate, so we would expect all mining companies, particularly big players, to play their part,” he said.
The leaked documents have prompted concern about the effectiveness of the government’s key climate policy, the safeguard mechanism, which forced BHP to pay less than $9m for excess emissions last year, according to analysis provided to the Guardian.
At the same time, it was given $622m in diesel tax concessions by the federal government, something critics say is creating an unnecessary incentive for it to keep using highly polluting diesel haulage.
Cook would not be drawn on whether he thought the federal government should do anything to change the rebate.
“Strictly speaking, the diesel fuel rebate is to subsidise, is to return an excise to the companies that don’t use the roads that the excise is actually designed to help support and fund,” he said. “But I’ll leave that up to others to debate. But I acknowledge and I accept that we want to, as governments, create the best environment to incentivise mining companies to continue to decarbonise their operations.”
The company has reduced its global emissions by 36% – largely due to the use of renewables in Chile and the closure of an uncompetitive nickel mine – but internal documents show its current plan to hit net zero has a “low probability of success”.
Analysts say it has done little to reduce emissions from its Australian operations.
