Hydropower

Climate Change

Our greenhouse gas emissions targets

15%

Reduction in emissions by 2025

50%

Reduction in emissions by 2030 

Net zero

Emissions by 2050

We have an important role to play in supporting and enabling the transition to net zero emissions. So we have put the net zero transition at the heart of our business strategy: combining investments in commodities that enable the energy transition with actions to decarbonise our operations and value chains.

But we know we must produce these materials in the right way, leaving the lightest footprint possible. This includes decarbonising our own assets and partnering to develop the technologies and products that will enable our customers to decarbonise their own processes.

Decarbonising our operations

We recognise that we have a major carbon footprint, significant Scope 1 and 2 emissions. And we know we must address this with urgency to be part of the solution.

In October 2021 we announced that we will accelerate actions to decarbonise our assets in the short term and aim for a 15% reduction in emissions by 2025 – five years faster than originally planned. We increased our 2030 target to a 50% reduction in our Scope 1 and 2 emissions. We remain committed to reaching net zero by 2050.

We estimate that we will invest approximately $7.5 billion in capital between 2022 and 2030 to deliver our decarbonisation strategy (approximately $1.5 billion over the period 2022 to 2024). There will also be incremental operating expenditure on building new capabilities, energy efficiency initiatives, and research and development of approximately $200 million per year to 2030.

Our 2021 scope 1 & 2 emissions

Our absolute Scope 1 and 2 emissions in 2021 were 31.1Mt CO2e (2020: 31.5Mt CO2e), 4.3% below our 2018 equity emissions baseline. The reductions achieved since 2018 are primarily the result of switching to renewable electricity contracts at Kennecott in the US and the Escondida mine in Chile (managed by BHP; Rio Tinto owns 30%), and also relate to unplanned operational disruptions in 2021 at Richards Bay Minerals in South Africa and the Kitimat aluminium smelter in Canada.

Calculating our emissions

Our approach used in the preparation of our 2020 Scope 1, 2 and 3 greenhouse gas (GHG) emissions inventory

Our actions

  • Develop renewable power in the Pilbara. The 34MW solar plant at Gudai-Darri and the 45MW battery system at Tom Price that we approved in 2020 are expected to come online in 2022. We are now targeting the rapid deployment of one gigawatt of wind and solar power. This will replace gas power and meet demand from our fixed plants and infrastructure, as well as support the early electrification and decarbonisation of our mobile fleet
  • Work with state and federal governments, power companies and renewable developers to dramatically increase the availability of renewables in eastern Australia, and aim to develop green repowering solutions for the Boyne Island and Tomago smelters
  • Advance the projects in our Marginal Abatement Cost Curve such as the deployment of zero-emission trucks and the use of hydrogen at our alumina refineries
  • Use a $75/t CO2e internal carbon price to incentivise energy efficiency investments and identify new mitigation projects
  • Scale up the ELYSISTM technology with the goal to have it available for installation from 2024. Construction of the first commercial-scale prototype cells of the inert anode technology has begun at our Alma smelter in Saguenay–Lac-Saint-Jean, Quebec

Capital allocation alignment with our 1.5°C decarbonisation strategy

We will align our capital expenditure plans with our long-term carbon emissions reduction targets, which are in line with the Paris Agreement’s objective of limiting global warming to 1.5°C. Having divested the last of our coal businesses in 2018, we are orienting our growth capex towards materials that enable the energy transition, including copper, lithium and high-grade iron ore.

Producing materials essential for the low-carbon transition

One of the three key elements of our business strategy is to grow in materials enabling the energy transition. Reaching net zero emissions globally will ultimately rely on increasing the supply of a range of metals and minerals supporting the development of clean technologies and associated infrastructure.

Each commodity we produce has a vital role to play in the low-carbon transition. Copper demand will rise with the renewable electrification of energy, and lithium will be a fundamental ingredient in electric vehicle batteries and grid-firming energy storage solutions.

Demand for aluminium will grow for uses like energy-efficient lightweight vehicles, and steel will also be essential in a range of applications, from high-speed rail networks, to wind and solar support structures and green hydrogen production facilities.

Our commodities will also continue to support urbanisation and the creation of energy-efficient urban centres. Cities in China, India and across Africa will continue to expand, with an additional 2.3 billion people expected to urbanise globally by 2050. This, along with growing incomes, will increase demand for materials essential for everyday life.

Partnerships across our value chains

We operate in energy- and carbon-intensive value chains – particularly steel and aluminium production – and recognise that we have a role to play in addressing the resulting emissions. We have updated our approach to calculating Scope 3 emissions to use regional factors rather than a global average.

 

 

Our customers and sustainability

Hideo Suzuki, Managing Executive Officer, Nippon Steel Corporation

 

Huang Yixin, Chairman, NISCO

Our 2021 scope 3 emissions

Our estimated Scope 3 emissions in 2021 were 553.5Mt CO2e, and around 95% is from the processing of iron ore, bauxite and other products by our customers. 94% of these processing emissions take place at our customer facilities in China, South Korea, Japan and other countries that have pledged to be carbon neutral by around mid-century.

Our approach to addressing Scope 3 emissions is to engage with our customers on climate change, to share information on respective goals and targets, and work with them to develop the technologies to decarbonise steel and aluminium production. We will continue to report on progress each year.

Our actions

  • Steel value chain
  • Aluminium value chain
  • Shipping

Steel is a vital material for low-carbon infrastructure and, with limits to recycling, our iron ore products have an important future role to play.

The future trajectory of our Scope 3 emissions is dependent on our customers’ decarbonisation roadmaps, which in turn will be guided by technology development and government policies, including carbon pricing.

About 28% of our iron ore sales are directly to steel producers that have already set public targets for their Scope 1 and 2 emissions (our Scope 3), and have ambitions to reach net zero by around mid-century. In 2022, we commit to engage with all our direct iron ore customers (representing approximately 75% of our iron ore sales and related Scope 3 emissions) to share information on our respective climate change goals and roadmaps, and actively seek areas of mutual collaboration on pathways to net zero, such as those highlighted in our iron and steel decarbonisation goals.

Our approach is to work in partnerships with customers, including China Baowu, Nippon Steel Corporation, POSCO and BlueScope, as well as technology providers, research institutes and universities to progress the following iron ore and steel decarbonisation goals:

  • Support our customers’ blast furnace optimisation, with potential carbon emission reductions of up to 30%
  • Explore future carbon-neutral pathways for our Pilbara iron ores through: ­
    • Existing and new technologies to beneficiate Pilbara ores
    • A proprietary low-carbon research project using microwave energy and sustainable biomass as a reductant
    • Assessing a mid-grade direct reduced iron (DRI) produced with green hydrogen and processed in an electric melter
  • Pursue a project to produce hot briquetted iron (HBI) with high grade iron ore and hydro-based green hydrogen in Canada
  • Find a pathway to develop Simandou to meet the future demand of high-quality iron ore for low-carbon steelmaking technologies

As a leading producer of low-carbon aluminium, we are actively involved in the decarbonisation of the value chain from bauxite to alumina and primary metal production.

About 74% of our Scope 3 emissions related to the downstream processing of bauxite and alumina sold to our customers is from the use of electricity, predominantly in China. The remainder is from the energy used for process heat at the alumina refineries of our bauxite customers and from the use of carbon anodes in aluminium smelting. Our plan is to address these through:

  • A commitment to engage with all our bauxite customers to seek areas of mutual collaboration in alumina decarbonisation projects, leveraging existing technical support relationships
  • The continued development of the ELYSISTM inert anode technology, with the goal to have it available for installation at our smelters from 2024, following the construction of large-scale commercial prototype cells at our Alma smelter in the Saguenay by 2023
  • Leveraging START, a new standard we launched in 2021 for transparency and traceability across the aluminium value chain, to support customer and consumer demand for sustainable products

We have an ambition to reach net zero emissions from the shipping of our products by 2050 and expect to meet the International Maritime Organisation (IMO) decarbonisation goal of 40% reduction in shipping emissions intensity by 2025, five years ahead of the IMO deadline. We expect to introduce net-zero emission vessels into our portfolio by 2030.

Charging On to reach net zero emissions

We know we can’t tackle the climate change challenge alone. That’s why we’re proud to partner with BHP and Vale – together with Austmine – to launch the Charge On Innovation Challenge. Our goal? To cut diesel use and emissions across our industry by finding a way to electrify mining truck fleets.

Innovation is the key to decarbonisation, and we expect the Challenge will deliver exciting new concepts that could drive huge long-term benefits for our industry and the environment.”

Mark Davies, Group Executive Safety, Technical and Projects

  • Employee looks out at West Angelas, Pilbara
    Decarbonising steel making
    Our engineers are working with experts from the University of Nottingham, England, on a promising new technology to help decarbonise the steel making process using sustainable biomass instead of coal.
  • Yarwun Alumina Refinery from the air
    Renewable hydrogen
    We have formed two partnerships to research using hydrogen to reduce emissions in alumina refining: a study with the Australian Renewable Energy Agency to assess hydrogen use in industry and support a coordinated approach to developing a local supply chain, and a study with Sumitomo Corporation into building a hydrogen pilot plant at our Yarwun alumina refinery in Gladstone, Queensland, Australia.
  • Haul trucks, Pilbara
    Zero-emission haul trucks
    To help us introduce zero-emission haul trucks at our global operations we’re working with manufacturers Caterpillar and Komatsu to test new technology at our sites.
  • Aurora borealis over ISAL
    Carbon capture and storage
    We are partnering with Carbfix  to implement a technology for capturing carbon and permanently storing it underground at our ISAL aluminium smelter in Iceland. Carbfix will use our land surrounding the ISAL smelter for onshore CO2 injection in the world’s first carbon mineral storage hub, the Coda Terminal. Liquified CO2 will be imported by ship from industrial sites across North Europe for storage. The partnership follows an investment earlier in October in Carbon Capture Inc., a climate tech start-up that focuses on developing modular Direct Air Capture units powered by renewable energy and with the potential to remove significant amounts of CO2 from the atmosphere for permanent underground storage.
  • Karratha rail, Pilbara
    Battery-powered trains
    We announced the purchase of four battery-electric trains for use in the Pilbara, Western Australia. Production is due to commence in 2023 ahead of initial trials in the Pilbara in early 2024. The locomotives will be recharged at purpose-built charging stations at the port or mine. They will also be capable of generating additional energy
    while in transit through a regenerative braking system which takes energy from the train and uses it to recharge the onboard batteries.
  • Artificial Intelligence
    Carbon mineralisation technology
    Innovative partnerships such as our project investigating carbon storage potential at the Tamarack nickel joint venture in Minnesota, the US, will help us find solutions to meet global climate goals. 

2021 performance

  • Total equity greenhouse gas emissions (million tCO2e)
  • Equity greenhouse gas emissions by product group (million tCO2e) 
  • Equity greenhouse gas emissions by location (million tCO2e)
  • Sources of total equity greenhouse gas emissions (percentage)