Whilst the $46.1 Billion ($71.7B AUD) of thermal coal exports may be at risk, the benefit of transitioning to alternative products may support the financial and environmental performance of mining companies in the long run.
Decarbonising the mining sector
Many large mining companies have set net zero or carbon neutral targets including BHP, Rio Tinto, and Glencore, however most stop short of including scope 3 emissions. Some have set scope 3 targets, but they are often not aligned with climate science. Fortescue Metals Group is an exception to this, having set their Real Zero targets of no fossil fuels emissions across their Scope 1 and 2 iron ore operations by 2030 and net zero Scope 3 emissions by 2040. Large emitters should expect continued scrutiny on their targets and claims - for example, oil company Santos is being taken to court over its claims that natural gas is a “clean fuel" and its plan to reach net zero emissions by 2040. The SBTi's net zero standard creates a framework for companies to set robust and credible net zero targets in line with a 1.5°C future, forcing consistency and reducing the grey areas that many high emitters have taken advantage of.
This spotlight on the sector shouldn't scare companies off from taking action - the journey to net zero will be long, but transparent and meaningful action based on scientific best practice will convince stakeholders of your serious commitment to the longevity of your business.
In the short term, opportunities to decarbonise should be explored, such as renewable energy, and unavoidable emissions should be compensated for through purchasing carbon credits. Mining companies could also identify opportunities to develop carbon projects on their land. As well as securing long-term access to carbon credits at stable prices, projects like this can create community and biodiversity co-benefits and help advance project technologies and methodologies.
In the long term, pivoting to lower carbon intensive products such as copper, nickel, lithium and cobalt - needed to produce wind turbines, batteries and electric vehicles among other things - will be necessary. Until a fully circular economy is realised, mining will continue to be a key source of materials for the world to decarbonise.
South Pole can assist in understanding the total environmental impacts of your operations from mining through to the use of the product, and identify emission reduction and carbon removal projects to achieve your net zero ambitions. Talk to us today to see where we can help on your climate journey.