Rio Tinto hikes GHG reduction goals, eyes at least 6 GW of renewable power to do so
Mining giant Rio Tinto unveiled more ambitious GHG emissions reduction targets 20 October while promising to use many gigawatts of wind and solar power in Australia to reach its emissions goals.
The company plans to reduce its Scope 1 and 2 carbon emissions by 50% by 2030, more than tripling its previous target, it said, adding that a 15% reduction was on the cards for 2025, five years earlier than previously planned.
Scope 1 emissions are direct emissions from sources controlled by an organization. Scope 2 emissions are indirect emissions associated with the purchase of power, steam, heat, or cooling. Rio Tinto hopes to reach net-zero scopes 1 and 2 emissions by 2050.
The company finally came round to tackling its Scope 3 emissions in February. It was an about-face for a company that in 2020 said considering such a goal was a bridge too far. Scope 3 emissions include all other indirect emissions that occur in a company's value chain.
Mining is a sector that will find it hard to abate its emissions, even its scopes 1 and 2 pollution, experts say, with substantial amounts of fuel required to extract the ore and then to transport it in the first place, and then transform it downstream by smelting for instance. Smelting typically requires large amounts of electricity.
Rio Tinto is the world's largest iron ore miner by volume, according to company filings. Much of that heads to China, the world's largest steelmaker. Because steel is produced through an energy-intensive manufacturing process that involves both iron ore and coal, Rio Tinto's Scope 3 emissions will be an especially substantial challenge.
Decarbonization capex jump
But with raised expectations throughout society for companies across all sectors, Rio Tinto plans to spend $7.5 billion between 2022 and 2030 on decarbonization efforts, it said.
And as prices for the metals required to meet the needs of the energy transition soar, Rio Tinto plans to prioritize growth in commodities, including copper, aluminum, and green steel. The company said it would double its growth capital expenditure to $3 billion/year from 2023 onwards.
"All our commodities are vital for the energy transition and continue to benefit from ongoing urbanization. We have a clear pathway to decarbonize our business and are actively developing technologies that will enable our customers and our customers' customers to decarbonize," Rio Tinto Chief Executive Jakob Stausholm said in the statement announcing the ambitions.
The company said sourcing renewable power for its iron ore operations in the Pilbara region of Western Australia as well as for its Australian aluminum smelters will be at the heart of its decarbonization drive in the coming decade.
In the Pilbara, Rio Tinto is looking at "rapid deployment" of 1 GW of wind and solar power. Such developments would abate around 1 million metric tons of CO2, replace natural gas-fired power currently used by plants and infrastructure, and support early electrification of mining equipment, it said.
Beyond that, the company wants to carry out a "full electrification" of its Pilbara system, including all trucks, mobile equipment and rail operations, which it said "will require further gigawatt-scale renewable [generation] deployment and advances in fleet technologies."
Rio Tinto also said it is looking at options for greener steelmaking for Pilbara iron ore, including with biomass and hydrogen. The company reckons it can reduce the carbon intensity of steelmaking by at least 30% by 2030, it said previously, and is planning on developing "breakthrough technologies with potential to deliver carbon neutral steelmaking pathways by 2050."
Some of the largest energy companies in the world are targeting the Pilbara as a customer for renewable energy and green hydrogen, including BP and TotalEnergies.
The British energy behemoth said a study into the feasibility of an export-scale green hydrogen and ammonia production plant in Western Australia found that production using renewable energy is technically feasible at scale.
TotalEnergies-backed Total Eren, meanwhile, signed a memorandum of understanding with Province Resources to carry out a feasibility study for the Australian miner's Hyenergy project in the Gascoyne region of northwestern Western Australia, which would utilize up to 8 GW of renewable electricity. The Gascoyne region is adjacent to the Pilbara region.
On the other side of Australia, Rio Tinto said it was working on switching the Boyne Island and Tomago aluminum smelters in Queensland and New South Wales, respectively, to renewable energy. The company said such changes will require around 5 GW (for Rio Tinto's share) of solar and wind power, along with a "robust firming solution." Rio Tinto owns 59.35% and 51.55% in the Boyne Island and Tomago smelters, respectively.
Rio Tinto's move is part of a growing embrace of emissions reduction commitments from the hard-to-abate mining sector as pressure from governments and investors grows.
At the start of October, the International Council on Mining & Metals (ICMM) announced that 28 miners, including some of the biggest names in the sector, had committed to net-zero Scope 1 and 2 GHG emissions by 2050 or sooner.
The ICMM members also promised to focus on absolute reductions, although "intensity rather than absolute targets may be more appropriate in the short and medium term." They added that where intensity targets are used, the companies will disclose the corresponding absolute increase or decrease in GHG emissions.
And some of Rio Tinto's biggest rivals also upped their game as the year progressed. Glencore had pledged to achieve net-zero Scope 1, 2 and 3 emissions by 2050 at the time of its 2020 earnings in February. By the time of the company's half-year report on 5 August, Glencore said it was raising the company's medium-term target to a 50% reduction by 2035 and introducing a new short-term target of a 15% reduction by 2026.
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