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Mining and extracting companies criticised over scope of net zero

Published March 25, 2020

Mining and extracting companies criticised over scope of net zero

Mining giant Rio Tinto has pledged to cut its operating emissions to net zero by 2050 and invest $1bn in climate-related projects over the next five years.

Rio Tinto’s new targets for 2030 are a 30% reduction in emissions intensity from 2018 levels and a 15% reduction in absolute emissions from 2018 levels. Under these targets, the company’s overall growth between now and 2030 will be carbon neutral.

Rio Tinto’s pledge followed oil supermajor BP’s announcement that it would become a net zero company by 2050. The company said it would cut or offset 360m tonnes of greenhouse emissions created by the oil and gas it produces every year through measures such as tree-planting and carbon capture.

Rio Tinto has subsequently been criticised for failing to include Scope 3 emissions in its plans for net zero. The FT for instance, noted that “Rio does not produce fossil fuels and does not sell carbon”, but its Scope 3 emissions, those produced by its supply chain and customers, are very high due to the production of iron ore. Nevertheless, “Rio has refused to set goals for its Scope 3 emissions.”

The same paper reported that Rio Tinto’s chief executive Jean-Sébastien Jacques as saying the company wants to put its own house in order. “We are focusing on reducing emissions at our operations…and we will continue to improve our environmental performance,” said Jacques.

Rio Tinto’s competitors BHP and Vale have both promised to introduce Scope 3 targets. Rio Tinto argues they are able to make those commitments because they produce fossil fuels and can, therefore, control their Scope 3 emissions. “We are the only large, diversified mining and metal company that is not selling either coal…or drilling oil and gas,” Jacques told the FT. 

BP has attracted praise for including Scope 3 emissions in its net zero commitment. Specifically, it pledged to reduce 360 MteCO2e a year of emissions from the oil and gas that it produces. The Guardian said: “The promise to halve the carbon intensity of products is potentially the most far-reaching part of BP’s new strategy. It recognises that petroleum companies have a responsibility for how their products are used. Until now, they have tried to foist these so-called Scope 3 emissions on to consumers.”

However, Akshat Rathi, an energy writer at Bloomberg News, pointed out:

“The BP climate plan includes cutting majority of Scope 3 emissions, about 360 million tons out of the 437 million tons. That is, net zero on oil and gas BP extracts and sells. But not yet on the crude it buys, refines, and sells.”

The FT also reported that the chief of mining company Glencore, Ivan Glasenberg, had dismissed BP’s net zero plans as ‘wishy washy’. Glencore, the world’s biggest exporter of thermal coal, forecast a 30% reduction in its absolute Scope 3 emissions — including those produced by its customers — over the next 15 years. Glencore has lower Scope 3 emissions than rivals such as BHP and Rio Tinto, which supply China’s steel industry.

Criticising BP, Glasenberg said 2050 was a ‘long way’ off and he preferred to be ‘precise and factual’ when talking about measures to reduce its carbon footprint. “Let’s talk about what we are actually doing,” said Mr Glasenberg. “2050 is a long way to go, and we don’t want to come out with wishy-washy ideas.”

Glasenberg expects the company to end its coal mining activities in Colombia by 2035 and to reduce them in South Africa and Australia. Instead, the company will turn its attention to mining metals such as copper and cobalt.

Nick Fedson, a Sustainability Analyst at Alfa Energy, said: “One of the problems with net zero targets is there is no governing body that approves them. This means organisations are free to define boundaries for their targets that exclude significant emissions out-of-scope of the target.

“Scope 3 emissions are of particular concern and usually account for the vast majority of corporate emissions. Supply chain emissions are on average 5.5x greater than direct operations emissions. If an organisation wants to show it is serious about climate action, it should consider a science-based target (SBT). These are approved by the Science Based Targets initiative (SBTi) and are based on rigorous criteria that must consider Scope 3 emissions if they are a significant contributor to an organisation’s emissions footprint – which on average, they are.”