{"data":{"id":"sbm2e2fee171b5ed7e2a88e4","short_id":204,"created":"2024-05-21T06:27:40.955Z","space_id":"spc2d334047ad0d7e7aa8046","project_id":"prj2d3336e5a90d264a70605","org_id":"org25a4efd179c5b5ba55d6e","content":{"name_ba03fa":"Andrew Rudyy","name-of-organisa_9974be":"BHP","upload-your-subm_09396f":"fil2e3367332b3fc44fec60f"},"is_topic":false,"title":null,"count_replies":0,"closed":false,"reply_to_id":null,"last_activity":null,"reactions":{},"_files":{"fil2e3367332b3fc44fec60f":{"id":"fil2e3367332b3fc44fec60f","bucket":"files-au-climate","remote_path":"cca/p/prj2d3336e5a90d264a70605/submission/spc2d334047ad0d7e7aa8046/BHP_comments_CCA_Targets_Pathways_and_Progress_consultation_paper.b48d52c0.pdf","url":"https://storage.googleapis.com/files-au-climate/cca/p/prj2d3336e5a90d264a70605/submission/spc2d334047ad0d7e7aa8046/BHP_comments_CCA_Targets_Pathways_and_Progress_consultation_paper.b48d52c0.pdf","filename":"BHP comments_CCA Targets, Pathways and Progress consultation paper.pdf","transcribed":"                                                                                              171 Collins Street\n                                                                                        Melbourne, Victoria 3000\n                                                                                                        Australia\n\n                                                                                              T +61 3 9606 3333\n21 May 2024                                                                                   F +61 3 9609 3015\n                                                                                                        bhp.com\nClimate Change Authority\n\nRe: Targets, Pathway and Progress paper\nBHP (hereinafter “we,” and “our”) appreciates the opportunity to provide comments in response to the\nTargets, Pathway and Progress paper (“Discussion Paper”) This submission discusses our positions and feedback regarding a number of interconnected elements of the climate transition in Australia that are of importance to BHP, as opposed to responding to every question raised in the Discussion Paper.\nBHP is a global resources company producing some of the essential resources needed to support the global energy transition. We strive to operate more reliably and efficiently than our competitors, generating social value as well as financial value. Our purpose is to bring people and resources together to build a better world.\nAs one of the world’s leading mining companies, we are committed to playing our part to help accelerate Australian and global pathways to decarbonisation. This includes increasing awareness of the vital role of the mining industry in providing essential commodities as building blocks for the renewable energy and other decarbonisation infrastructure required to enable a net zero greenhouse gas (“GHG”) emissions future. BHP’s Climate Transition Action Plan 2021 and Annual Report 2023 outline our approach to reducing GHG emissions and managing climate-related risks, including our climate change targets and goals.\nHow should the authority take account of climate science and Australia’s international obligations in considering possible emissions reductions targets for 2035?\nBHP supports the aims of the Paris Agreement to limit the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to\n1.5°C. The world must work toward these aims with increased levels of national and global ambition to limit the potential impacts of climate change. We recognise and support the Australian\nGovernment’s GHG emissions reduction targets, and encourage Government policies to enable the broadest and lowest cost abatement possible.\nHow should the authority weight the goals of ambition and achievability in considering possible emissions reductions targets for 2035?\nWe believe there needs to be a right balance between ambition and achievability and a detailed analysis of key decarbonisation dependencies, enablers and blockers should be conducted in consultation with key economic sectors and associated sectoral emission reduction plans to inform this balance.\nUsing our own approach as an example, our operational (scope 1 and 2) greenhouse gas emissions target and net zero goal were set based on us seeing a credible, though not straightforward, pathway to achieving them. Our medium-term operational (scope 1 and 2) greenhouse gas emissions target for FY2030 of at least a 30 per cent reduction from FY2020 baseline was informed by detailed internal analysis to understand opportunities to achieve and maintain our long term goal of net zero operational emissions by CY2050. Our early analysis identified and quantified potential operational\n\fdecarbonisation pathways and has provided essential data to inform decision-making and prioritisation of BHP’s investments in operational decarbonisation initiatives. Our analysis of decarbonisation pathways informs our annual business planning cycle. Defining a pathway to net-zero operational\nGHG emissions for our long-life operated assets requires planning for the long term, and a deep understanding of the development pathway for low emissions technologies (LETs). Our strategy has three elements, all of which are embedded in annual planning cycles. First, we work to adapt mature technologies such as light electric vehicles and purchasing renewable electricity via power purchase agreements. Second, preparing for the medium term, we create road maps for the development and adoption of LETs that support our goal of net-zero operational emissions, which may include trials and demonstrations of technology in our production environments such as decarbonisation of fleet via electric haul trucks. Finally, we look for early-stage LETs that hold high potential for future results. For these emerging technologies, we seek opportunities for collaboration with suppliers (E.g. equipment manufacturers) and industry partners for research and development and other ways (E.g. trials) to accelerate their commercialisation.\nTherefore, bottom-up understanding of what each economic sector and different geographic regions can achieve by 2035 is necessary, as is identifying the key constraints to develop an ambitious but realistic target. We suggest an approach which recognises both the ability to make near term emissions reductions across economic sectors, and anticipates the steps which need to be taken in the period to 2035 to enable deeper decarbonisation beyond 2035. We view this understanding as key to the Government undertaking comparative economic analysis of alternative targets.\nWhat technologies are important for each sector’s pathway to net zero and why?\nBHP is a global resources organisation and a key player in Australia’s resources sector. In the resources sector, we expect to displace diesel primarily via electrification of vehicles and mining equipment using low to zero GHG emission electricity sources (e.g. renewable electricity). We anticipate that many new technologies will have unique or new benefits, as well as challenges. For example, electric haul trucks (compared to current state diesel haul trucks) have superior fuel-to-wheel energy efficiency, although improvements to battery size, cost, capacity and replacement cycles are needed before large-scale adoption can be achieved.\nDiesel displacement via electric vehicles and mining equipment will increase the amount of electricity required by our operated assets. Future electricity demand will also be amplified by the planned GHG emission reductions of our industry peers, many of whom are also looking to electrification. We expect demand-side management and load optimisation will become more important, including matching time-of-use and time-of-consumption. Depending on our ability to manage load and reduce peak power demand, many of our sites are likely to require increased capacity in transmission lines providing electricity to site.\nIn some of our more isolated locations (e.g. Pilbara and Goldfields in Western Australia) there is currently a shortage of available renewable electricity development. We are working with electricity generators, network operators and renewable electricity developers to explore opportunities to increase availability in these locations. For detailed views on the importance of availability of renewable energy please refer to our submission on the Electricity and Energy Sector Plan Discussion\nPaper available at: https://www.bhp.com/sustainability/climate-change/advocacy-on-climate-policy.\nCertain hard-to-abate GHG emission sources, such as high heat, feedstocks and diesel for ancillary equipment (e.g. dozers, graders, tugboats) have potential solutions, but they are currently uneconomic and technically challenging to implement and operate.\nFor our steelmaking coal mines, mitigating fugitive methane emissions are considered hard-to-abate as there are very few available solutions that are at a satisfactory technological and commercial readiness level for use in the mines we operate. While methane drainage is a mature technology for underground mining, it is novel for open-cut mining. This is especially the case at established mines\n\fwhere the integration of gas drainage and handling is likely to lead to mine planning and other operational challenges. These interactions need to be better understood, as do the geological conditions that are favourable (or otherwise) for effective gas drainage in this new and untested open- cut mining context.\nBiofuels may also play an important role for hard to decarbonise processes and applications, as well as in a transitional capacity. However, for biofuels to be competitive in Australia, the associated challenges of high capital and production costs, ability to reach efficient scales of production, and managing ongoing competition for feedstocks need to be overcome. Sufficient safeguards should also be developed to address any potential social or environmental concerns from biofuels (e.g. concerns in Europe around alleged fraud relating to the origin of imported hydrogenated vegetable oil). We encourage the Government to look to other more mature markets such as European Union and United\nStates to establish appropriate frameworks for wider adoption of biofuels.\nIt is important to note that many of the technologies we will need to achieve our net zero goal are not ready to be deployed now and will require a significant technological step change in safety, reliability, productivity, availability, and economics.\nHow can governments use mandates, rules, and standards to accelerate Australia’s decarbonisation? Is more planning by governments needed? If so, how should this be coordinated and how can this be done while making the transition inclusive, adaptive, and innovative?\nOur continued reduction of operational GHG emissions (I.e. Scope 1 and Scope 2 from operated assets) relies on clear, consistent, stable, and effective climate-related regulations and policies. Our pathway to our net zero goal, as for most companies, is a multi-decade challenge that requires fundamental shifts in market design, reporting regimes and energy infrastructure. Stable and effective climate-related regulations and policies are crucial to our success because they enable effective long- term strategic decision-making and are directly and indirectly supportive of actions that reduce GHG emissions.\nWe encourage collaboration between all levels of Government, business, finance, and the scientific community to find, develop and deploy solutions to reduce GHG emissions. Cost-effective, reliable, secure, renewable, and low GHG emissions energy is fundamental to delivering the large-scale emissions reductions required to achieve the world’s collective climate goals and producing the commodities to drive the transition. It will be vital when developing the decarbonisation plans for sectors that there is collaboration and consistency across different sector plans, including the resources sector which is a key user of electricity and energy.\nIt is also important to emphasise the need for coherence and consistency across policy frameworks, including across different levels of government, particularly as it relates to the energy system and its participants.\nFinally, shortages of necessary skillsets risks delaying the transition. In an increasingly automated and decarbonised world, Australia’s mining and energy sectors will need new skillsets and capabilities to prosper. Decarbonisation will radically increase the demand for electrical and trade skills and implementing more technology in the continued shift towards automation will require higher order capabilities across analytics and data science. The vast wave of infrastructure investment across transport, energy and mining is building a foundation for long-term economic prosperity for Australia.\nRealising this prosperity will require a significant skilled workforce. Similar – if not the same – skillsets will be sought across infrastructure, energy, and mining, creating the potential for competition between these sectors and risks to progressing the projects on time and budget. Challenges can be expected across the breadth of new infrastructure projects, from design and approvals, through to execution and operation as well as supply chain constraints and time delays if there is a lack of adequate skills within the workforce. Skills shortages for engineering consultants are anticipated, including specialized\n\felectrical network design, regulatory approvals personnel, construction crews, and highly skilled operators, specialized skilled workers and engineers in the field post commissioning. A range of options to combat this looming skills shortage is required, including training, transitioning, and immigration.\nWe also encourage the Government to seek bipartisan agreement on medium to long term climate policy to enable the type of long-term high capital decarbonisation decisions required in industrial sectors such as mining and mineral processing.\nIn addition, we have provided our thoughts on the Carbon Leakage Review: Consultation Paper,\nElectricity and Energy Sector Plan Discussion Paper as well as BHP’s paper on Recapturing\nAustralia’s Competitiveness, that may be relevant for this question. Please refer to the BHP submissions available at: https://www.bhp.com/sustainability/climate-change/advocacy-on-climate- policy.\nHow can governments better support markets, including carbon markets, to deliver emissions reduction outcomes?\nWe encourage the Australian Government to cover a greater proportion of the economy with a market- based policies like the Safeguard Mechanism, and furthermore, seek ways to foster a unified carbon market across different sectors of the economy, as recently recommended by the Productivity\nCommission 1. Doing so, if designed well, could allow Safeguard facilities to access a greater pool of lower cost abatement options, as well as create a market incentive for other sectors in the economy.\nWhat further actions can be taken by governments (e.g. through public funding), the private sector and households to accelerate emissions reductions, including in relation to the deployment of technologies and access to new opportunities in the transition to net zero? What barriers stand in the way and how could they be overcome?\nCoordination across policy settings, stakeholders, key industries, and the broader economy is central to accelerating emissions reductions. These efforts rely on clear, consistent, stable and effective climate-related regulations and policies, and collaboration between all levels of Government, business, finance, and the scientific community. Within this frame, BHP acknowledges the Government’s establishment of the Net Zero Economy Agency within the Department of Prime Minister and Cabinet and the introduction of the Net Zero Economy Authority Bill 2024 to the Australian Parliament. In particular, we highlight the Authority’s role in promoting an orderly and positive economic transformation associated with achieving net zero emissions.\nWe also note the opportunities that can be created through such initiatives for growth through greater economic complexity and, in turn, enhanced social value. It is important to acknowledge the role of government in supporting enabling infrastructure, particularly where it supports the zero emissions growth of industries including minerals, renewable energy, and green manufacturing, and facilitates the transition of the communities on which they depend.\nHow can governments better ensure First Nations people are empowered to play a leading role in the development and implementation of climate change policies and actions, including as they relate to the ongoing curation of the Indigenous estate?\nThe opportunities that arise from the climate transition, such as renewable energy projects located on the traditional lands of Indigenous peoples, should be undertaken with the integration of Indigenous voices, knowledge, values and perspectives. The opportunities to co-design plans and for Indigenous participation in the construction of renewable energy assets has the potential to generate economic benefits for Indigenous communities. When key stakeholders are integrated into the energy transition\n\n\n1\n Productivity Commission (2023), 5-year Productivity Inquiry: Managing the climate transition, Vol. 6, Inquiry\nReport no. 100.\n\fprocesses affecting their communities, trust and transparency can be enhanced, which can lead to overall enhancements in renewable energy development.\n\n\n\n\nGraham Winkelman\nVice-President Climate, BHP\n\f","size":173419,"redacted":[],"meta":{"name":"BHP_comments_CCA_Targets_Pathways_and_Progress_consultation_paper.b48d52c0.pdf","local_path":"files/wWFOVS4k9ndgkcPH5Iu5EEl_.pdf"},"config":{}}}}}