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BHP sticks to current decarbonisation goals

BHP (ASX:BHP) has announced that it will not accelerate its decarbonisation plans beyond its existing target of reducing emissions by 30 percent by 2030. The company’s head of management, Graham Winkelman, made this statement during an investor briefing, emphasising that BHP intends to focus on taking concrete actions to address its scope 1 and 2 emissions.

Similar to other mining and industrial majors, BHP has faced pressure from activists to improve its carbon emissions targets. However, Dr. Winkelman stated that the company is committed to an achievable strategy that will enable it to meet its current goals. He highlighted that BHP has already achieved a 24 percent reduction in operational emissions compared to 2020 levels, primarily by utilising renewable energy at its massive Escondida mine in Chile.

Despite this progress, BHP faces a significant challenge in reducing diesel consumption, which is necessary to power trucks at its large mining sites. The company had approximately 14 million tonnes of carbon equivalent emissions in 2020, which decreased to just under 12 million tonnes by the end of the 2022 financial year.

BHP’s presentation indicates that its emissions are expected to increase by approximately 2 million tonnes due to organic growth at its global operations. However, this growth will be offset by the acquisition of a larger volume of renewable power purchase agreements. Unfortunately, the company anticipates only a minimal reduction in diesel use by 2030, underscoring the difficulty of eliminating this aspect from its emissions profile.

BHP’s decision to maintain its current decarbonisation targets reflects its commitment to taking tangible steps toward reducing its environmental impact. While the company recognizes the importance of addressing emissions, it acknowledges the challenges associated with achieving substantial reductions in certain areas, such as diesel consumption. By prioritising action on its scope 1 and 2 emissions, BHP aims to make meaningful progress within its operational boundaries while exploring opportunities to further enhance its environmental performance.

As the global focus on sustainability intensifies, BHP’s approach will continue to face scrutiny from stakeholders advocating for more ambitious carbon reduction measures.

Balancing environmental concerns with operational realities remains a complex task for companies operating in carbon-intensive industries.

BHP’s emphasis on achievable goals and ongoing efforts to reduce emissions demonstrate a commitment to sustainable practices, but the company will need to continually assess and adapt its strategies to meet evolving expectations and global climate targets.