Fortescue embarrasses BHP and Rio Tinto on steelmaking targets
The Australasian Centre for Corporate Responsibility (ACCR) is commenting on Fortescue Metals Group’s (ASX:FMG) announcement that it has set a target to reach net zero Scope 3 emissions by 2040, which incorporates emissions from steelmaking.
Fortescue had previously committed to reaching net zero operational emissions by 2030.
Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:
“Fortescue has set a target of decarbonising steelmaking by 2040 through the use of green hydrogen—a bold and welcome commitment.
“Green hydrogen, rather than hydrogen made from fossil fuels, is the future of heavy industry, and Fortescue is determined to prove that.
“FMG’s bold target overshadows the lack of ambition by BHP and Rio Tinto, whose absence of firm targets for steelmaking is looking increasingly lacklustre.
“BHP and Rio Tinto should be embarrassed by being outdone by a company they once referred to as a ‘junior miner’. It’s time for BHP and Rio Tinto to set binding targets for their Scope 3 emissions, rather than simply funding research and working with their customers.
“This announcement is particularly humiliating for BHP, given the impending vote on its climate plan and the valid concerns that proxy advisers have expressed regarding BHP’s lack of action on steelmaking.
“BHP’s interest in sustaining the value of its metallurgical coal business is clearly hampering its ambition to reduce emissions from steelmaking.
“In the lead up to COP26 in Glasgow, Fortescue has demonstrated the type of corporate leadership that Australia has been lacking for decades. BHP and Rio Tinto should take note.”
Peer comparison of medium and long-term targets
|Company||Medium-term target||Long-term target||Scope 3|
|Anglo American||Reduce net emissions by 30% by 2030 (2016 baseline).|
Improve energy efficiency by 30% by 2030 (2016 baseline).
|Net zero operational emissions by 2040.||Shipping: Partnered with the GlobalMaritime Forum and founding signatory to the Sea Cargo Charter (established a standard methodology to measure and align shipping emissions to the Paris Agreement).|
Introduced LNG fuelled capesize+ vessels.
|BHP Group||Reduce operational emissions by at least 30% by 2030 (2020 baseline).||Net zero operational emissions by 2050.||2030 goals: Support development of technologies capable of 30% reduction in integrated steelmaking; Support 40% emissions intensity reduction of BHP-chartered shipping.|
2050 targets: Net zero by 2050 for operational GHG emissions of direct suppliers, subject to widespread availability of carbon neutral goods and services; Net zero by 2050 for GHG emissions from all shipping of BHP products, subject to the widespread availability of carbon neutral solutions.
Goal of net zero Scope 3 emissions by 2050.
|Fortescue Metals Group||Net zero operational emissions by 2030 (2020 baseline).||Net zero operational emissions by 2030.||Net zero Scope 3 emissions by 2040.|
Reduce emissions intensity in shipping of FMG iron ore by 50% by 2030 (on 2021 levels).
Reduce emissions intensity in steelmaking by FMG customers by 7.5% by 2030 (on 2021 levels).
|Glencore||50% reduction of total (Scope 1, 2 and 3) emissions by 2035 (2019 baseline).||Ambition to achieve net zero for Scope 1, 2 and 3 emissions by the end of 2050.||50% emissions reduction by 2035 (2019 baseline) and ambition of net zero Scope 3 emissions by end of 2050.|
|Rio Tinto||Reduce emissions intensity by 30% by 2030.|
Reduce absolute emissions by 15% by 2030 (2018 equity baseline, adjusted for divestments).
|Ambition to reach net zero operational emissions by 2050.||Scope 3 goals:|
- Reduce Rio Tinto-chartered shipping emissions intensity by 40% by 2030; net zero ambition by 2050.
- Work with customers to develop and invest in technology to reduce carbon intensity of steelmaking by at least 30% by 2030; net zero by 2050.
- Develop breakthrough technology enabling net zero aluminium smelting.
|Vale||Reduce Scope 1 and 2 absolute emissions by 33% by 2030 (2017 baseline).|
Reduce Scope 3 emissions by 15% by 2035 (2018 baseline).
|Net zero operational emissions by 2050.||Shipping: Supporting a reduction in shipping emissions intensity by 40% by 2030 and 50% absolute emissions by 2050, aligned with IMO targets - EcoShipping Program.|
Partnerships and investment in emissions reduction technologies, particularly in steel decarbonisation.
BHP’s Climate Transition Action Plan will be voted on by shareholders at its upcoming AGMs in the UK (14 October) and Australia (11 November). ACCR’s analysis of BHP’s plan can be found here.