Greenhouse gas emissions

We accept that the activities of human beings and companies are contributing to climate change, through the emission of greenhouse gases (GHG). These gases include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), hydroflurocarbons (HFCs) and sulphur hexafluoride (SF6).

We also accept the work of the Intergovernmental Panel on Climate Change (IPCC) as a starting point from which to develop our policies. Our Climate Change position guides our work to reduce greenhouse gases.

How we manage greenhouse gases

We have been reporting our GHG emissions publicly since 1996. In addition to our annual external verification of health, safety and environmental data, we have participated in the Australian Greenhouse Challenge verification programme. In addition, external consultants have, on two occasions, reviewed the methodology we use against the standards of the IPCC and the World Business Council for Sustainable Development.

Our greenhouse gas emissions are largely dependent on how well we manage our energy use. To that end, we have instituted a comprehensive programme of energy audits at our operations to identify a range of energy saving opportunities, and several of these have already been successfully implemented.

In 2004, we set five year targets to reduce our greenhouse gas emissions by four per cent per tonne of product by 2008 (using a 2003 baseline) and to reduce energy use per tonne of product by five per cent per tonne of product over the same period.

We are also a leading international coal producer, and so we are helping to develop technology for carbon capture and storage worldwide.

In addition, we are a significant supplier of uranium oxide for the world's nuclear industry, which is a low emitter of greenhouse gases. Along with developing  processes for product stewardship, we have formed - with other uranium producers - a group to look at the implications of the entire fuel cycle.

How we measure and account for greenhouse gases

Our greenhouse gas emissions inventory includes all six greenhouse gases in the Kyoto protocol that are above reporting thresholds. These thresholds have been set to ensure that over 95 per cent of emissions are accounted for. In 2006, no emissions of SF6 or HFCs were reported.

The way in which we report on greenhouse gas emissions is consistent with the Greenhouse Gas Protocol of the World Business Council for Sustainable Development and the World Resources Institute, and the understanding of issues associated with data reliability is continuing to improve.

Our results

Total emissions

The Group's total greenhouse gas emissions in 2006 were equivalent to 28.3 million tonnes of CO2.

Total greenhouse gas emissions increased 5.8 per cent in 2006 compared to 2005.

Fifty four per cent  or 15.3 million tonnes of CO2-e were emissions produced on site at operations over which we have direct management control. These emissions occurred in the consumption of fuels, anodes, reductants and explosives or when electricity is generated, or coal seam gases and perfluorocarbons are released from operational processes. Emissions were also generated from land management (including livestock).

The remainder (46 per cent or 13 million tonnes of CO2-e) were from emissions associated with purchased electricity and steam, minus emissions from the electricity and steam exported to non Rio Tinto entities.

Over the past five years, there has been a 14 per cent increase in total emissions and a 17 per cent increase in on site emissions. Most of the change is due to continuing expansions and new developments.

We believe it is important to track emissions along the value chain, to understand where emissions are occurring and to reduce these wherever possible.  There are indirect emissions associated with our products over we do not have direct management control. These include emissions from the transport of products, the combustion of coal and from the conversion of iron ore into steel by third parties, as well as:

• Third party transport of products and raw materials in 2006 contributed 6.6 million tonnes of CO2-e under contracts managed by us or others. 
• Based on 2006 coal production, combustion of our coal produced by customers for electricity generation and steel production generated an estimated 364 million tonnes of CO2-e. 
• Based on our 2006 iron ore production, steel manufacture by iron ore customers generated approximately 255 million tonnes of CO2-e. The coal used in this process may be from our coal products and, therefore, these emissions cannot be added to the those associated with the combustion of coal by customers, as this would result in double counting.

Greenhouse gas emissions efficiency

In 2006, our performance against our target reduced compared to that in 2005, with our greenhouse gas emission efficiency improving 0.3 per cent compared to 2003.

This is short of where we want to be in regard to our target of four per cent reduction per tonne of product by 2008, compared to 2003.  Our emissions efficiency result is significantly affected by both production interruptions and changes in the emission intensity of purchased electricity. The major scheduled maintenance shutdown of the Kennecott Utah copper smelter significantly impacted our performance per unit. Without that smelter shutdown, our performance would have been one per cent better. An increase in the emission intensity of our purchased electricity, particularly in South Africa, reduced our overall performance by over 0.6 per cent.

Greenhouse emissions by source

Emissions associated with the generation of electricity and steam purchased (less exports) by our operations contributed almost half (46 per cent) of total greenhouse gas emissions in 2006. The remaining 54 per cent of emissions were associated with on-site emissions and included:

• Emissions from the use of fossil fuels, including anodes and reductants.

• Process gases, particularly coal seam gas, carbonates and perfluorocarbons (PFC). Other process gases come from the use of explosives, coal oxidation and from on site landfills.

• Land management, which includes emissions associated with livestock and land clearance (releasing greenhouse gases) minus the uptake from sequestering greenhouse gases by revegetating land during and after mining.

Total emissions by gas source in 2006