The revelation that BHP cancelled and delayed commitments to act on the climate crisis should be a wake-up call.
It matters in its own right: millions of tonnes of additional heat-trapping pollution will go into the atmosphere, adding to climate harm and making Australia’s climate targets that much harder to reach.
It also matters for the influence the world’s biggest miner could have in accelerating use of technology needed to cut pollution from major industrial operations.
BHP is not alone among its peers in stepping back its climate action. Rio Tinto has slashed spending on projects to reduce emissions and disbanded its specialist decarbonisation unit. Other major corporations have either jumped in fear of Donald Trump or used his rise as an excuse to drop climate commitments.
But the scale of BHP’s reversal, revealed in documents leaked to the Guardian and the ABC, is significant.
It shelved the first big investment planned under its decarbonisation plan – a huge solar farm – after it was approved and funded by its board. A much larger solar, wind and battery development that would have run most of its inland operations in northern Western Australia has been delayed for at least five years.
BHP has also doubled down on using diesel-powered trucks, despite a promise to switch to a fleet of electric vehicles running on renewable energy. Internal documents acknowledge this is inconsistent with its climate pledges.
Making promises to cut emissions is the easy part. Designing and spending up on plans to achieve those cuts is a tougher exercise. Inevitably, there will be bumps on that road. But the leaked documents show that is not what has happened here. Instead, BHP has balked at commitments that a company of its heft and worth could prioritise if it chose.
The company’s own estimates suggest that its full decarbonisation could cost US$7.5bn over the next 25 years. It brings in the equivalent revenue in less than six months from its WA operations alone.
BHP is famously known as the Big Australian – a reflection of its success and scale since its origins mining silver and lead in Broken Hill 140 years ago. It remains at or near the top of lists of the country’s most profitable companies. In many ways, it is a responsible corporate citizen. It and Rio pay more tax in Australia than any other company.
But it is also a historic, global-scale polluter, mostly thanks to its mining of coal. Its extraction of that dirty fuel means it has been in the upper echelon of corporate emitters since industrialisation.
The thinktank InfluenceMap lists it as the 31st biggest cumulative contributor to the climate crisis, and the 10th biggest among companies owned by private investors.
Over the past 140 years, it has been responsible for more than 11bn tonnes of carbon dioxide pumped into the atmosphere, counting the pollution released when its customers use its products. That’s equivalent to about 25 years of Australia’s current annual emissions.
These days its marketing emphasises the need to cut emissions. It has sold some coalmines, and offloaded its petroleum arm – its oil and gas assets – to the Australian fossil fuel giant Woodside. It mines iron ore, copper, nickel and potash as well as metallurgical coal, used in steelmaking.
But selling coal, oil and gas assets doesn’t help the planet. Those businesses continue to operate in other hands. And the BHP files show the company is now a long way from where it was in 2019, when its then chief executive, Andrew Mackenzie, told an audience of the powerful in Britain that fossil fuel dependence was a potential existential threat.
The company says it is acting – that its emissions are down 36% since 2020, putting it ahead of its target of a 30% reduction by 2030. But the detail here matters. The claimed cut is due to power purchase agreements signed for some grid-connected renewable energy projects, particularly in Chile, and the 2024 suspension of its struggling Western Australian nickel operations.
Its direct onsite emissions, mostly from burning diesel, continue. And its annual report shows its scope-three emissions – those that result from the use of its products – have increased by 7% since the turn of the decade. The scale of that increase – more than 25m tonnes a year – dwarfs the reduction the company claims it has made.
There is a strong case, given the scale of its contribution to the problem, that BHP has a responsibility to invest heavily now to cut its emissions more rapidly than others and help accelerate solutions that could have a global impact.
One reason it hasn’t might be that the Australian Labor government is sending mixed messages to big miners even as it pledges the country will reach net zero emissions by 2050.
Mining companies receive more than $4bn a year in rebates on the cost of diesel that are not offered to households and small businesses. BHP is the biggest beneficiary. According to the thinktank Clean Energy Finance, the fuel tax credit scheme lowered its fuel bill by about $620m last year.
Making fossil fuels cheaper is a strange way to encourage the uptake of electric trucks running on renewable energy. It also works against the goals of a government policy that requires big industrial sites, including those operated by BHP, to cut emissions year-on-year.
That policy, the safeguard mechanism, also has an out. It allows companies to buy an unlimited number of carbon offsets instead of making direct cuts in pollution. And, for now at least, offsets are pretty cheap.
The BHP files show that the company could reduce its reliance on offsets, and it certainly doesn’t need the diesel rebate. Rather than have its fossil fuel use subsidised by Australian taxpayers, it needs policies that encourage it to actually live up to its rhetoric – and move much faster in the direction it has promised to go.
Adam Morton is Guardian Australia’s climate and environment editor