(Agence Ecofin) – Despite their efforts to reduce carbon emissions in production processes, mining companies are still struggling to achieve the objectives set. A new report from the firm dss+ reveals a worrying delay and provides new elements of explanation.
At the current rate of emissions reduction, mining companies risk being 40% below the target needed to limit warming to 1.5°C by 2030, as set out in the Paris Agreement. This forecast comes from a new report published by the dss+ firm following a study carried out among 52 mining companies, which reveals a worrying gap between the ambitions displayed and the progress made.
According to the document entitled « Decarbonising mining in an era of growing demand for critical metals and minerals » and read by Ecofin Agencymining companies reduced their emissions on average at an annual rate of 2% between 2018 and 2021. This rate, “still relevant”would be well below the 4.5% necessary according to the firm to achieve the climate objectives of this sector (see graph below).
According to the report, this gap can be explained by several structural factors, including the decline in ore quality, which forces operators to intensify extraction efforts, thus increasing energy requirements for ventilation and cooling. deep mines. Other difficulties lie in monitoring emissions, in particular those known as Scope 3, which include emissions generated downstream by transport or the transformation of resources. These emissions represent up to 60% of the sector’s total greenhouse gases, but they are still poorly taken into account in companies’ decarbonization strategies. Furthermore, according to business leaders interviewed by dss+, decarbonization in the mining sector is hampered by several other obstacles such as fragmented decisions between sites, insufficient monitoring of emissions, and poor incentive policies to support investments in mining. clean technologies.
The dss+ firm’s report is not the first to sound the alarm about the mining sector’s delays in decarbonization. Data published by some companies themselves reveals stagnation in reducing emissions. Rio Tinto, for example, reported Scope 1 and 2 emissions of 32.6 megatonnes in 2023, compared to 32.7 megatonnes in 2022 (adjusted for acquisitions). For its part, BHP recorded a slight increase in its emissions, going from 9.1 megatons in 2023 to 9.2 megatons for the 2024 financial year. In addition, several other organizations have already highlighted the paradoxical situation in which finds the industry: it must meet a growing demand for critical metals for the energy transition while reducing its emissions. In 2023, the International Finance Corporation (IFC) said in a report titled “The Net Zero Roadmap to 2050” that copper and nickel production will need to increase by 200-300% by 2050 to meet climate goals, but CO₂ emissions from their value chains could subsequently double.
Faced with these challenges, solutions are emerging to accelerate decarbonization and meet climate expectations. dss+ encourages more transparency in the declaration of annual emissions which should take more into account Scope 3 emissions. Added to this is the development of a more structured decarbonization plan and the improvement of energy supply. The firm recommends the adoption of internal carbon pricing, a concept which is based on the fact that by assigning a virtual cost to CO₂ emissions, the company will seek to reduce this virtual cost through optimized financial decisions.
These solutions seem to go in the same direction as those suggested by the IFC to reduce emissions from the copper and nickel sectors by 90% by 2050 by transforming the value chains of these two metals. IFC’s proposals include the adoption of renewable energy and electrification of equipment, process optimization to improve energy efficiency, and automation and digitalization to reduce inefficiencies. Proactive management of residual emissions, through carbon offsets and CO₂ capture technologies, is also among the priorities, as is collaboration between businesses, governments and investors.
Few elements currently allow us to advance on the practical feasibility of these different proposals and whether they will be sufficient to transform a key sector for the global energy transition, but still too emitting. According to several consistent sources including Globaldata and McKinsey, the mining industry is one of the highest emitting sectors, representing between 4 and 7% of direct global greenhouse gas (GHG) emissions, a figure which reaches 28%, or 19 440 megatons of carbon dioxide equivalent when Scope 3 downstream emissions are included. The success of the decarbonization of the sector will depend on the will of the players in the mining sector and the commitment of policymakers to overcome structural and financial obstacles.
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