The leading global miner, BHP Group Ltd (NYSE:BHP), has announced an anticipated increase in operational carbon emissions for 2024. Vice President for Climate Graham Winkleman revealed the news during an investor briefing on Wednesday. Despite this setback, BHP remains committed to reducing its operational greenhouse gas emissions by at least 30% from 2020 levels by 2030.
"We're seeing emissions rise due to organic growth," Winkelman noted. "As we dig deeper to maintain production levels, the ore we extract has lower metal content, requiring more activity and consequently more diesel consumption," he said, as reported by Reuters.
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BHP's approach to decarbonizing its operations includes increasing the use of solar power and moving directly to full-battery electric trucks, bypassing hydrogen and hybrid options. This decision underscores the company's commitment to sustainable practices, although it presents significant challenges as it works to replace its diesel-powered fleet.
The company has faced growing pressure from investors to provide a clearer plan for reducing emissions from its customers, particularly in the steelmaking sector, which accounts for approximately 7% of global carbon emissions. While stating that customer emissions are beyond its direct control, BHP plans to collaborate with steel producers in developing technologies to reduce emissions intensity by 30% by 2030.
BHP's strategy relies heavily on emerging technologies, such as carbon capture, utilization, and storage (CCUS), which are part of the emissions reduction plans for nine of the world's top 10 steelmakers. Dan Heal, Vice President of Operational Decarbonization at BHP's Australia business, emphasized that the transition to electric trucks would mostly be achieved through fleet replacement rather than retrofitting, Reuters reported.
In addition to aiding the steel industry, BHP plans to cut emissions in shipping. The company is considering ammonia-fueled ships and methane drainage before mining to significantly reduce methane emissions at Australian coal mines. Still, BHP has acknowledged that reaching net zero by 2050 remains uncertain.
The company has also indicated that it might need to build a carbon offset portfolio to meet its goals, despite its current stance against relying on carbon offsets to achieve its 2030 targets.
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