PERTH (miningweekly.com) – Diversified miner BHP on Wednesday told shareholders that the company would likely need to make use of high-integrity carbon credits to offset greenhouse gas (GHG) emissions which could not be avoided as part of its net zero goal by 2050.

BHP head of carbon management Graham Winkelman said in a presentation that the miner was on track to deliver its 2030 target of at least a 30% reduction, and on its long-term goal of net zero operational GHG emissions by 2050.

“In 2022, our operational GHG emissions were 11-million tonnes of carbon dioxide-equivalent, adjusted for divestments and methodology changes. It’s a good start from our 2020 baseline and has been achieved primarily through introducing renewable electricity at many of our operated assets, notably in Chile.

“But the path to 2030 is more challenging,” Winkelman said.

He noted that BHP’s emissions profile is now weighted towards diesel, and while technology solutions for diesel displacement were emerging, many were not yet available at scale.

“In addition, our business activity is expected to grow to 2030, which under the current circumstances would lead to some growth in emissions. Countering this growth, we plan additional deployment of renewable energy before 2030, and further effort to deliver abatement across other emissions sources, including diesel, fugitive methane and natural gas.”

BHP’s near-term growth plans are expected to see an uptick in the miner’s emissions, with Winkleman telling shareholders that in order to move faster on its decarbonisation pathway, BHP will be reliant on the availability of technology still under development.

“Despite effort to date and our plans going forward, the challenge of eliminating natural gas and removing fugitive methane emissions, in addition to the viable advances needed in diesel displacement technology, continues to shape BHP’s future emissions pathway. However, on a cumulative basis, we remain ahead of a net zero trajectory until around 2035,” he said,

“We maintain the option to use high-integrity carbon credits for GHG emissions that cannot reasonably be entirely avoided. And while unlikely to be necessary for our 2030 target, we can anticipate the need for some carbon credits to deliver on our net zero goal. And we may be required to source and relinquish carbon credits in coming years to meet compliance obligations under Australia’s safeguard mechanism,” he added.

BHP head of decision evaluation, transformation portfolio and performance Patrick Collins said on Wednesday that the miner would spend A$4-billion on decarbonisation capital until 2030, with the majority of the spend to be allocated to the most diesel-intensive assets and to be weighted towards the back-end of the decade, allowing technology to mature.

“Around 75% of decarbonisation capital over this period will be on diesel-displacement projects. And while this spend delivers some emissions reductions towards the end of this decade (through initial deployments), it is critical to advance tech readiness, equipment trials, and [begin installation of supporting infrastructure] in order to accelerate the emission reductions in the following decades.

“If we don’t do this, we can still achieve our 2030 target, but we’ll be facing a significant headwind to achieving our 2050 ambition,” Collins said.