Sustainability cover image

Climate Change Report


Our approach to climate change

Climate Change Report 2022
2.27 MB
Scope 1, 2 & 3 Emissions Calculations Methodology 2022
1.32 MB
Industry Association Disclosure 2022
407 KB
  • Past reports

    Climate Change Report 2021
    Climate Change Report 2021
    2.31 MB
    Scope 1, 2 & 3 Emissions Calculations Methodology 2021
    3.87 MB
    Industry Association Disclosure 2021
    1.94 MB
    Climate Change Report 2020
    Climate Change Report 2020
    3.48 MB
    Scope 1, 2 & 3 Emissions Calculations Methodology 2020
    1.52 MB
    Industry Association Disclosure 2020
    107 KB
    Climate Change Report 2019
    Climate Change Report 2019
    7.05 MB
    Industry Associations & Climate Change 2019
    220 KB
    Climate Change Report 2018
    7.18 MB

2022 highlights

  • Accelerate the decarbonisation of our assets
  • Develop products and technologies that help our customers decarbonise
  • Grow in materials enabling the energy transition

Accelerate the decarbonisation of our assets

Iron Ore

  • Pilbara: Planned investment of $600 million in 230MW of solar power facilities and 200MWh of storage. This is in addition to the 34MW solar facility installed at Gudai-Darri.
  • Pilbara: Developed partnerships with Scania, Caterpillar, Volvo and Komatsu to deploy more efficient autonomous haulage solutions and battery-powered trucks.
  • Marine biofuels: Joined a trial with BP.


  • Queensland smelter repowering: Commenced evaluation of proposals to repower our aluminium assets with up to 4GW of wind and solar, backed up by energy firming and storage solutions.
  • Queensland Alumina: Progressed to a pre-feasibility study for a double digestion project to reduce emissions and operational expenditure.

Copper and Minerals

  • Rio Tinto Iron and Titanium (RTIT) Quebec Operations: Committed $537 million (C$737 million) in partnership with the Government of Canada to decarbonise RTIT Quebec Operations and boost critical minerals processing.
  • Richards Bay Minerals: Partnered with Voltalia for solar power (20-year power purchase agreement).
  • Renewable diesel: Launched a pilot at Boron, with trials also planned for Kennecott.

Develop products and technologies that help our customers decarbonise

Green steel

  • Blast furnace optimisation: Extended our collaboration with over 20 customers, such as Baowu, POSCO, Nippon Steel Corporation and Shougang, with potential carbon emissions reductions of up to 30%.
  • BioIronTM: Successfully piloted an innovative, low-carbon iron-making process on Pilbara iron ore.
  • Hydrogen-based DRI1: Collaborated with BlueScope and Salzgitter Flachstahl to test direct reduction of our products using green hydrogen and develop cleaner processing options.


  • ELYSISTM: Conducted commercial testing of direct emissions-free smelting technology with 450kA cells under construction.
  • Low-carbon material: Partnered with organisations including Volvo, Ford and AB InBev (Corona Canada).

Copper and Minerals

  • NutonTM: Joined strategic partnerships to test leaching technology on legacy copper waste and sulphide orebodies.
  • Critical minerals from waste: Began extracting tellurium concentrate at Kennecott. Achieved first production of scandium oxide and demonstration of an innovative spodumene (lithium) concentration process at our Critical Minerals and Technology Centre (RTIT Quebec Operations).

Grow in materials enabling the energy transition

High-grade iron ore

  • Simandou: Signed a non-binding term sheet with our partners to progress the co-development of infrastructure. The project will deliver high-grade iron ore, suitable for the DRI-EAF2 steelmaking process.


  • Arvida: Invested in a new aluminium recycling facility and plans to replace our closing smelter with an expansion of the AP60 smelter to produce low-carbon aluminium.
  • Alma: Committed $188 million to expand production of higher-value low-carbon billets.
  • Laterrière Plant: Commissioned a new aluminium remelt furnace.

Copper and Minerals

  • Oyu Tolgoi: Acquired full ownership of Turquoise Hill Resources Ltd (TRQ) for $3.1 billion, increasing our direct project ownership to 66%.
  • Rincon: Acquired Rincon for $825 million and approved funding of $194 million for early works to develop an accelerated starter plant with planned expansion.

Jakob Stausholm

Chief executive

We will only invest in quality assets which will give robust returns under a range of economic, geopolitical and carbon scenarios, creating a resilient portfolio with significant upside to the energy transition. We are applying similar thinking to our approach to decarbonisation."

Jakob Stausholm


Over a year ago, we put the low-carbon transition at the heart of our new strategy, setting a clear pathway to deliver long-term value as well as ambitious targets to decarbonise our business.

Our purpose is to find better ways to provide the materials the world needs. Meeting the incremental demand of the energy transition, and ensuring local supplies of critical minerals globally, deepens our relevance to the world and ensures our long-term profitability. We are creating real momentum, and seeing early results gives me conviction that we have the right objectives, the right team, and the right strategy.

Our Scope 1 and 2 emissions targets of 15% reductions by 2025 and 50% by 2030 are aligned with 1.5°C – the stretch goal of the Paris Agreement – and are really challenging. In contrast to many of our peers, about 80% of our emissions are driven by processing and producing metals and minerals, which are high temperature, hard-to-abate activities. The remaining 20% are from our mining operations. The low-carbon transition is complex: developing new technologies and implementing major projects to decarbonise our business will take time.

We estimate that we will invest $7.5 billion in capital between 2022 and 2030 to deliver our decarbonisation strategy. So we need to be disciplined about our capital investment and make a commercial case for each mitigation project. Our experience shows that we cannot solve this simply by allocating capital. We also need to attract the right talent, deploy new technology at scale, secure approvals from regulators and partner respectfully with local communities and Indigenous peoples. In addition, higher carbon prices and other government incentives are needed to drive the production and consumption of low-carbon metals and minerals.

In 2022, our Scope 1 and 2 emissions were 30.3Mt CO2e (31.0Mt in 2021), a reduction of 7% below our 2018 baseline. This is primarily the result of switching to renewable power at Kennecott and Escondida in prior years, as well as lower than planned production from the Kitimat and Boyne aluminium smelters in 2022. We did not advance the actual implementation of our abatement projects as fast as we would have liked last year, so our capital expenditure on decarbonisation projects was $94 million, lower than we anticipated when we set our targets. Challenges have included late delivery of equipment, resourcing constraints impacting study progress, construction and commissioning delays, and project readiness.

6+1 abatement programmes

In response, we established six abatement programmes, with dedicated people, to focus on the decarbonisation challenges that cut across our product groups: repowering our Pacific Aluminium Operations, renewables, ELYSISTM, alumina process heat, minerals processing and diesel transition. We are building capability and gaining a deeper understanding of our decarbonisation challenge (both constraints and opportunities), and our related operational expenditure increased to approximately $140 million in 2022. As a result, we are better placed to deliver the complex and large-scale structural changes to our energy system needed to achieve our 2030 target.

Given the long lead times for some of these projects, we established one additional programme to increase our investments in nature-based solutions projects and now expect these to make a more significant contribution to our targets. If done well, these projects can play a substantial role in addressing carbon emissions and biodiversity loss, while also providing benefits to local communities. Our people working on these “6+1” abatement programmes, and our substantial investments in technology, will drive the innovation and transformation needed to accelerate our low carbon transition and ensure the long-term resilience of our business.

Scope 3 partnerships

Our Scope 3 emissions were 584Mt CO2e in 2022 – over 1% of the global total. These are primarily from our customers in Asia, processing our iron ore into steel and bauxite into aluminium, so our level of control is limited. The best way to tackle these emissions is to work in partnerships to develop the technologies needed to produce low-carbon metals and minerals. Last year we increased our engagement with our customers, governments, universities and others. It is encouraging that the initial testing phase of our BioIronTM process showed great promise and demonstrated that using microwave energy and sustainable biomass as a reductant is well suited to Pilbara ores. And we are continuing to scale up the ELYSISTM technology – the world’s first carbon-free aluminium smelting process – towards the demonstration of even larger commercial-size cells.

In the past year, I have spent time engaging with a diverse range of stakeholders on the need to work together and address climate change with urgency. Given the structural changes we must make to our energy system, 2030 is just around the corner. Our success relies on our ability to strengthen our resilience to the physical, societal and economic effects of climate change and the energy transition, while building partnerships and capabilities that enable us to secure new opportunities.

Our Climate Action Plan – 2022 progress and 2023 update

In 2022, our shareholders supported our Climate Action Plan (CAP) in a non-binding advisory vote on the company’s ambitions, emissions targets and actions to achieve them. We will continue to publish our progress on climate change annually in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The Board is fully aligned with this action plan and believes it will deliver value for our shareholders, our customers and wider society. The table below summarises progress in 2022 and our action plan in 2023.

1. Scope 1 and 2 emissions targets and roadmap

We have committed to reach net zero by 2050 and have set ambitious interim targets relative to our 2018 equity emissions baseline: to reduce greenhouse gas (GHG) emissions by 15% by 2025 and to reduce GHG emissions by 50% by 2030.1

  • Progress in 2022

    Repowering Pacific Aluminium operations

    • We issued a request for proposal for more than 4GW of wind and solar projects to support repowering of the Boyne smelter. Tomago issued expression of interest seeking renewable projects to support repowering of the smelter (a non-managed joint venture).


    • We installed the first 34MW of solar capacity at Gudai-Darri and announced that we are planning to invest $600 million for solar, storage and transmission to deliver a further 230MW of solar power and 200MWh storage in the Pilbara from 2023-2026. We started construction for the first phase of our 30MW project at Kennecott and commenced direct market engagement for our US footprint (Boron, Resolution, Kennecott) for around 1GW of renewables. We issued expression of interest for an islanded 35MW microgrid at Amrun and signed a Solar PV 130MW power purchase agreement (PPA) for Richards Bay Minerals (RBM) with Voltalia. Construction of a 20MW hybrid project continued at QIT Madagascar Minerals.


    • Production from our pilot cell continued, as did construction of larger commercial scale cells at Alma.

    Alumina process heat

    • We developed our approach to decarbonising our refineries. Order of magnitude studies for electric steam generation and electrical infrastructure requirements are in progress. A feasibility study has been completed for the hydrogen calcination project. An order of magnitude study for double digestion has been completed with approval to proceed with the pre-feasibility study.

    Minerals processing

    • $537 million (C$737) partnership with the Government of Canada to decarbonise RTIT Quebec Operations and boost critical minerals processing.

    Diesel transition

    • We have progressed biofuel trials at Boron and Kennecott. We began trialling an underground battery electric loader and haul truck at Kennecott. We delivered our first road-sized haul truck into the Pilbara for testing.

    Nature-based solutions (NbS)

    • We completed pre-feasibility studies for NbS projects at five high-potential landscapes.
  • Actions in 2023

    Repowering Pacific Aluminium Operations

    • Progress renewable supply options for the Boyne and Tomago aluminium smelters.


    • Approve and commence construction of 100MW solar PV for the Pilbara. Progress studies on the next 130MW solar PV for the Pilbara. Sign PPA for Amrun microgrid and start construction in 2023/24. Sign a Wind PPA at RBM. Sign commercial agreements for our US operations (Kennecott, Resolution and Boron).


    • Commission 450kA ELYSISTM cells currently under construction at Alma.

    Alumina process heat

    • Develop the decarbonisation energy transition strategy for the Yarwun and Queensland Alumina (QAL) refineries. Complete feasibility studies for electric steam generation and thermal storage options at QAL and Yarwun, and seek approval for electric boilers at Vaudreuil. Advance studies on double digestion, hydrogen and electric calcination. Commence construction of hydrogen calcination industrialisation demonstration at Yarwun.

    Minerals processing

    • Commission Blue Smelting demonstration plant at RTIT, Quebec, to test ilmenite pre-reduction process. Commence industrial trials of biochar at RTIT Quebec Operations and RBM, and investigate options to develop a sustainable supply chain. Commission plasma burner pilot at IOC.

    Diesel transition

    • Progress plans to convert the entire fleet at Boron to renewable diesel ahead of the requirement to do this in California in 2024. Develop a viable trolley assist option for the existing haul fleet to enable substantial reduction in diesel use while on trolley.

    Nature-based solutions

    • Conduct feasibility studies for the development of five carbon offset projects.

1. Our net zero commitment applies to our Scope 1 and 2 emissions only. For planning purposes, we define short-term as up to two years, medium-term as 2-10 years and long-term as beyond 10 years. For our analysis of physical climate risks, we define short-term as 2030, medium-term as 2050 and long-term as 2100.

2. Scope 3 emissions goals and customer engagement

Our approach to addressing Scope 3 emissions is to engage with our customers on climate change and work with them to develop and scale up technologies to decarbonise steel and aluminium production.

  • Progress in 2022

    Steel value chain

    • Engaged with nearly all our direct iron ore sales customers (representing two thirds of our total iron-ore related Scope 3 emissions). This has led to decarbonisation collaboration and projects with customers accounting for 59% of our direct iron ore sales.
    • Partnerships on track. We advanced 49 projects, together with over 30 partners.

    Aluminium value chain

    • Initiated engagement with customers representing nearly all of our bauxite sales.


    • 30% reduction in emissions intensity achieved (relative to 2008 baseline). On track to exceed target through energy saving initiatives and use of transitional fuels (biofuel/LNG).
    • Accelerating development of end-state fuels (green methanol and green ammonia) via partnerships.
    • Completed installation of energy savings devices on first vessels capable of 10-12% emissions reductions.
  • Actions in 2023

    Steel value chain

    • Progress work on a microwave lump drying pilot plant with Baowu.
    • Develop BioIronTM at a larger scale, via a specially designed continuous pilot plant.
    • Complete concept studies with BlueScope and determine the next phase of processing Pilbara ores with hydrogen and a melter.

    Aluminium value chain

    • Agreement to hold workshops on decarbonisation confirmed with three major customers representing over half of our sales. Further engagement with other bauxite customers will depend on the level of interest.


    • Review biofuels plan following completion of 12-month trial. Progress partnerships on end-state fuels.
    • Advance programme to install energy savings devices on our vessels during dry-docking.
    • Incorporate (over 2023-24) nine LNG dual-fuel chartered vessels into our fleet.
    • Advance iron ore green corridor development in partnership with the Global Maritime Forum.

3. Capital allocation alignment with our 1.5°C decarbonisation strategy

We estimated that we will invest $7.5 billion in capital between 2022 and 2030 to deliver our decarbonisation strategy (approximately $1.5 billion over the period 2022 to 2024).

We also expected our incremental operating expenditure to support the CAP to be in the order of $200 million per year, including research and development initiatives. For example, we planned to spend about $50 million on our iron and steel decarbonisation initiatives in 2022.

  • Progress in 2022
    • Our capital expenditure on decarbonisation projects in 2022 was $94 million compared to an originally estimated spend of $500 million. Our incremental operational expenditure to support the CAP including spend on steel decarbonisation initiatives, was approximately $140 million.
    • Operational expenditure on steel decarbonisation initiatives was $24 million in 2022. Resourcing constraints, COVID-19 lockdowns and the need to develop the business case for some technologies has delayed some projects.
  • Actions in 2023
    • Depending on project planning, approvals and implementation, we estimate that our capital expenditure on decarbonisation will increase over the three years to 2025 and total $1.5 billion. Our incremental operational expenditure in 2023 is estimated to be $200 million for the six abatement programmes and offset development.

4. Climate policy engagement

We continue to encourage our industry associations to align their advocacy with the goals of the Paris Agreement. We review the climate advocacy of our industry associations each year, and we publish our review on our website and consider it when we decide whether to renew our memberships.

  • Progress in 2022
    • We published our review of industry associations in February 2022 and conducted an interim and year-end review of their advocacy. We engaged with four industry associations to discuss their climate advocacy.
  • Actions in 2023
    • In 2023, we will publish our review of industry associations and maintain our engagement with them on climate advocacy.

5. Climate governance

In the short-term incentive plan (STIP), safety, environment, social and governance matters, including climate change, are now assigned an explicit performance weighting of 35%, of which 20% relates to safety and 15% to ESG. The “E” component is 5% of the STIP and relates entirely to climate change performance objectives.

  • Progress in 2022
    • In 2022, the business approved or delivered Scope 1 and 2 abatement projects that would contribute 0.29Mt CO2 of abatement towards the 2025 target against a target of 0.8Mt.
    • Achieved specific milestones relating to steel decarbonisation, zero-carbon aluminium and shipping.
  • Actions in 2023
    • Climate change performance objectives are assigned an explicit performance weighting of 10% in the STIP in 2023. We will assess progress of moving carbon abatement projects through the various stages of development all the way to execution to meet our decarbonisation ambition.

6. Just transition

We are committed to supporting a just transition to a low-carbon economy that is socially inclusive and provides decent work and livelihoods.

  • Progress in 2022
    • In 2022, we established an Executive Committee-sponsored cross-functional just transition working group, undertook an assessment of our current just transition maturity, and developed a tool to profile risks and opportunities at our assets.
  • Actions in 2023
    • In 2023, our priorities include assessing just transition-related risks and opportunities across our assets; defining just transition principles; awareness-raising across the business; and continued engagement with civil society organisations, host communities, employees and others.

7. TCFD disclosure

We support the TCFD recommendations and are committed to aligning our disclosures with the Climate Action 100+ (CA100+) Net Zero Company Benchmark in 2023 reporting.

  • Progress in 2022
    • Climate-related disclosures on governance, strategy, risk management, and metrics and targets were integrated into the 2021 Annual Report. Our CAP aligns with the CA100+ Net Zero Company Benchmark.
  • Actions in 2023
    • We will continue to publish our progress on climate change annually in line with the recommendations of the TCFD.