Who we are

Greenhouse gas emissions

We accept the urgent need for climate change action and recognise the issue as being one of our greatest challenges and opportunities. We are identifying ways to improve how we do business so that we actively contribute to solutions. Controlling emissions that lead to climate change is a difficult task. It also imposes costs for greenhouse gas abatement and necessitates changes to the way we and our customers generate and use energy. For this reason we are focusing on the seriousness of this issue from both an economic and environmental perspective. Further details can be found at our online report.

Since 2003, Rio Tinto's climate change programme has had three core themes:

• reducing emissions from our operations;
• understanding and developing low emission product pathways by working with others on supply chain emissions and on breakthrough technologies; and
• engaging with governments and stakeholders to advocate sound and efficient domestic and international policies.

Rio Tinto continues to navigate successfully through a challenging and fast changing external environment. We remain confident that our programmes will deliver value to our business and enhance our reputation.

Key steps in 2007

• Together with BP we launched Hydrogen Energy, which will develop decarbonised energy projects around the world. The venture will initially focus on hydrogen-fuelled power generation, using fossil fuels and carbon capture and storage technology to produce new large scale supplies of clean electricity. Hydrogen Energy is our first major foray into new business arenas which are being opened up by climate change and energy policy.
• On the Carbon Disclosure Project we were one of only four companies worldwide (one of only two carbon intensive companies) to achieve a perfect score in the Climate Disclosure Leadership Index. We were ranked number one in the Mining and Metals sector.
• Alcan was included in the FT500 Climate Disclosure Leadership Index and the Canada 200 Climate Disclosure Leadership Index. Alcan was ranked number one for disclosure in the high carbon impact sector in the Canada 200 report.
• After over a decade of involvement Rio Tinto remains a committed supporter of the Australian Greenhouse Challenge Plus programme.
• Rio Tinto renewed its sponsorship of Battelle's Global Energy Technology Strategy Programme (www.battelle.org).
• We obtained regional climate predictions for six businesses using the University of Oklahoma Climate Model to improve our understanding of physical climate change impacts and to determine what adaptation measures may be needed in future.
• Both Rio Tinto and Alcan participated in a number of collaborative efforts to promote effective public policy frameworks to address climate change, including the US Climate Action Partnership (USCAP) and made submissions on proposed legislation to governments in Australia, the US, New Zealand and Canada.
• Rio Tinto's executive committee continues to centrally fund certain greenhouse gas reduction and/or energy efficiency projects. Two successful examples of how this fund has been applied include: Partnering with Forestry NSW to test commercial scale forestry on buffer land at Rio Tinto Coal Australia sites; and reviewing energy use at our Richards Bay Minerals and Quebec Iron and Titanium operations.

Future direction for 2008

• Hydrogen Energy and Masdar (Abu Dhabi's initiative for renewable and alternative energy and clean technology) have agreed to work together on an industrial scale hydrogen fired power generation project with carbon capture and storage in Abu Dhabi. The project is expected to limit greenhouse gas emissions by capturing some 90 per cent of the carbon dioxide generated, and safely and permanently store up to 1.7 million tonnes of carbon dioxide per year. The plant is expected to be in commercial operation by 2012.
• We will develop new strategies and capabilities to participate in emerging carbon trading markets.
• Our climate change leadership panel will transform into an advisory panel with external and internal members to improve our understanding of climate change and our decision making capabilities.

Rio Tinto's total greenhouse gas emissions, made up of on-site emissions and those from the purchase of electricity and steam, were 28.3 million tonnes of carbon dioxide equivalent (CO2-e) in 2007. This is the same as in 2006, which is commendable given the rate of expansion across the Group.

We believe it is important to understand the impact of our products along the value chain. There are energy efficiency and greenhouse gas emission benefits associated with the use of many of our products, like uranium use for power generation, aluminium use to make cars lighter, borate use in insulation products and copper use in high efficiency motors. However, there are significant greenhouse gas emissions associated with the transportation, processing or use of Rio Tinto's products. For 2007, these include:

• 6.6 million tonnes of CO2-e associated with third party transport of our products and raw materials;
• around 42 million tonnes of CO2-e associated with processing bauxite and smelting alumina that Rio Tinto sold to third parties;
• an estimated 344 million tonnes of CO2-e associated with customers burning our coal for electricity generation and steel production; and
• approximately 268 million tonnes of CO2-e associated with steel produced from our iron ore. Note that some steel producers use both Rio Tinto coal and iron ore, thus to avoid double counting, these emissions cannot be added to those associated with the combustion of our coal above.

Alcan's total greenhouse gas emissions were 27.8 million tonnes of CO2-e, calculated on an equity share basis. The new combined Aluminium product group is expected to make up about two thirds of Rio Tinto's gas emissions in the future (as shown).

*excludes greenhouse gas emissions from Alcan's Engineered Products and Packaging divisions

Rio Tinto's greenhouse gas emissions per tonne of product have only decreased 0.7 per cent compared to 2003. We are not on track to meet our four per cent reduction target by 2008. This is due to a decline in energy efficiency (see discussion in the energy section), expansion activities such as overburden removal and land clearance, changes in ore grades and purchased electricity emission factor increases, particularly in South Africa. These effects overshadow efficiency gains elsewhere in the Group.

Alcan's 2010 target was a ten per cent improvement in on-site greenhouse gas emissions per tonne of product from a 2005 baseline. In 2007, performance had improved by four per cent as a result of efficiency improvements, retrofitting best in class technology and shutdown of some under performing operations.

Prior to 2003, considerable improvements in high intensity perfluorocarbon (PFC) emissions control were realised at both Rio Tinto and Alcan aluminium smelters. Following this historic step change, achieving additional gains in smelting efficiency has been more difficult. Prioritisation and implementation of projects to improve energy efficiency remain a focus for Rio Tinto.

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