Greenhouse Gas Emissions
BHP Billiton is both a user and producer of fossil fuel energy products that create greenhouse gas emissions. Scientific evidence suggests that greenhouse gas emissions associated with fossil fuel consumption and other human activity are contributing to global warming. Global warming may be associated with an increasing frequency of extreme weather conditions that could have a significant impact on the environment and the quality of human life.
Looking forward over the next two decades, global demand for minerals and energy is anticipated to continue to grow, with the strongest growth in developing countries. Some of the least greenhouse gas intensive routes will grow the quickest over the next 20 years. Access to affordable energy, minerals and metals is a critical component of poverty alleviation and social and economic development and, therefore, will remain central to society.
Our challenge as a member of global society is to help meet the world's minerals and energy needs while mitigating the potential impact of greenhouse gas emissions on the climate. Our focus is both on controlling the emissions that we produce at our sites around the world and on seeking ways to reduce the emissions produced by our customers when they consume our products.
See the following for:
- details on Our Approach to this challenge
- an understanding of Our Drivers
- An External View on the challenge.
Our Approach
In 1995, we were one of the first participants in the Australian Greenhouse Challenge program, which was designed to encourage reductions in greenhouse gas emissions. We started measuring our greenhouse gas emissions in 1993 and have publicly reported our greenhouse gas emissions data since then.
Our philosophy is that what we measure we can improve, and so we set a target of reducing the greenhouse intensity of our operations by 10 per cent between 1995 and 2000. Greenhouse gas intensity is measured by emissions per unit of production, including the purchase of electricity, at operated sites.
We exceeded our original target, achieving a 12 per cent improvement. In 2002 we extended the target to a further five per cent over the years 2002 to 2007. Again, this has been exceeded. In 2007, a new target will take effect.
In addition to targeted reduction of greenhouse gas emissions at our sites, we require that all sites that emit over 100 000 tonnes of CO2-e have greenhouse gas and energy conservation management plans.
Furthermore, as part of the investment evaluation process, we require carbon to be priced into our investment decisions for any project that will emit more than 100 000 tonnes of CO2-e. Our price series for carbon are revised annually and have appropriately high and low ranges to reflect the uncertainty associated with forecasting the price of carbon credits. The price series are also intended for use in strategy development.
In addition to controlling emissions associated with production at our sites and evaluating the potential impact of future regulation of carbon, we also undertake activities to address the current and future needs of our customers in regards to greenhouse gas emissions associated with the consumption of our products.
In this regard, we have identified emissions trading as an area of opportunity. Our Energy Marketing group has been selling coal bundled with Certified Emission Reduction units (raised via clean development mechanism projects) to our coal customers in Europe. This is allowing us to develop knowledge and skills in emissions trading and is enabling us to continue to better package the fuel supply requirements of our customers.
Another area of increasing priority is research, development and demonstration of low emissions technologies. This includes Coal Bed Methane research and capture of methane in ventilation air, as well as support for external research such as the US FutureGen project, COAL21, the Australian Cooperative Research Centre for Greenhouse Gas Technologies and the CRC for Coal in Sustainable Development.
For further information refer to:
- BHP Billiton Climate Change Position Statement for an overview of our climate change policy
- Climate Change Related Activities and Priorities
- address by Chip Goodyear, Chief Executive Officer, BHP Billiton, to 19th World Energy Congress, Sydney, Australia, September 2004: Delivering Sustainability In An Energy Company
- address by Jon Dudas, Chief Commercial Officer, BHP Billiton Energy Coal, to Coaltrans Conference, Barcelona, Spain, October 2004, Strategies For Supplier In A Carbon Constrained World.
Our Drivers
There are a number of drivers of our climate change policy and actions.
Our customers, particularly in Europe, are impacted by regulation of their greenhouse gas emissions and we can create value by responding to their needs. We will continue to explore ways to assist them to reduce their emissions footprint.
In addition, we must continue to be proactive in setting and achieving internal emission intensity reduction targets, in order to respond constructively to community expectations and government regulation.
To deliver long-term growth in shareholder value, we must continue to strategically plan for market shifts, threats and opportunities. As a result of climate change, we expect that the market share for gas as a fuel for power generation will grow, given its lower greenhouse gas intensity, its proximity to markets and the desire of our customers to diversify their fuel supplies. There are a wide range of possible changes to energy markets, and analysis and actions to take account of these is one driver of our strategy. Failure to respond to customer needs and anticipate regulatory change will ultimately impact on the demand for our products and the costs of doing business.
Finally, the communities in which we operate and where we sell our products are concerned about the impacts of climate change within their national borders and globally. To earn their respect and attract and retain employees, we must be a responsible company.
An External View
'Many resources companies' forecasts are extrapolations that do not take account of a carbon constrained future. It is important that companies like BHP Billiton look beyond the current resources boom and test strategy in a truly carbon constrained scenario. For example, it is important to consider trends such as dematerialisation, where lighter and less resource intensive products will be the norm. It is also essential that business leaders not rely on technology being a "silver bullet" which will eventually solve the greenhouse gas problem and as a reason for deferring thinking and action to find solutions today.'
Greg Bourne, CEO, WWF Australia
