Greenhouse Gas Emissions
The Company is both a user and producer of fossil fuel energy products that create greenhouse gas emissions. Fossil fuels are an important source of energy globally, and the use of these fuels underpins economic growth and development globally.
Looking forward over the next two decades, global demand for energy will continue to grow, with the strongest growth in developing countries. Access to affordable energy is a critical component of poverty alleviation and social and economic development and, therefore, will remain central to society.
The concept of climate change suggests that greenhouse gas emissions associated with human activity are contributing to global warming and that steps must be taken to mitigate this. Our challenge as a member of global society is to help meet the world’s energy needs while mitigating the potential impact of greenhouse gas emissions on the climate.
Refer to the following sections on:
- details on Our approach to this challenge
- an understanding of Our drivers
- An external view on the challenge from members of our Forum on Corporate Responsibility
Our approach
Back in 1995, we were one of the first participants in the Australian Greenhouse Challenge program, which was designed to encourage reductions in greenhouse gas emissions. We started measuring our greenhouse gas emissions in 1993 and have publicly reported our greenhouse gas emissions data since then. Our philosophy is that what we measure we can improve, and so we set ourselves a target of reducing the greenhouse intensity of our operations by 10 per cent between 1995 and 2000.
We exceeded our original target, achieving a 12 per cent improvement, and in 2002 we extended the target to a further 5 per cent over the years 2002 to 2007. Greenhouse gas intensity is measured by emissions per unit of production, including the purchase of electricity, at operated sites.
Refer to our Climate Change Position Statement (see www.bhpbilliton.com/bbContentRepository/Policies/ClimateChange.pdf for details on our climate change policy). Our approach includes:
- site-level greenhouse gas and energy conservation management plans
- assessment of emissions over a product’s life cycle
- the development of knowledge and skills in emissions trading
- pricing carbon into our investment decisions
- research into geological sequestration and low-emission technologies.
For internal purposes, we estimate the level of emissions emitted by our customers when they use our products. Unlike companies that generate and distribute energy, we are not in a position to report this data with the same accuracy (nor are we able to verify this figure) given our position in the supply chain. This being said, it is important to understand emissions over the life cycle of our products. We use these internal estimates so that we can prioritise areas where we need to work most closely with our customers.
Our drivers
There are a number of drivers of our climate change policy and actions.
The communities in which we operate and where we sell our products are concerned about the impacts of climate change within their national borders and globally. To earn their respect and attract and retain employees, we must be a responsible company.
To deliver long-term growth in shareholder value, we must continue to strategically plan for market shifts, threats and opportunities. An impetus for these can be climate change and the debate that surrounds it. For example, we expect that the market share for gas as a fuel for power generation will grow, given its lower greenhouse gas intensity, its proximity to markets and the desire of our customers to diversify their fuel supplies.
We must continue to be proactive in setting and achieving emission intensity reduction targets, in order to respond constructively to community expectations and government regulations regarding climate change. Failure to do so will ultimately impact on the costs of doing business and affect the demand for our products.
An external view
‘Given BHP Billiton’s large fossil fuel reserves, particularly coal, the Company must work with customers to ensure its most efficient transport and use, with the goal of eliminating greenhouse gas pollution as quickly as possible. WWF believes BHP Billiton should report on the emissions and the emission intensity of the transport and use of its fossil fuel energy products by customers, to provide a transparent account of their full life cycle, not simply their production.’
David Butcher, Chief Executive Officer, WWF – Australia
‘It is clear BHP Billiton has an intelligent and proactive approach towards GHG [greenhouse gas] climate effect mitigation. From a business viewpoint, I would encourage BHP Billiton to consider, while the profits from fossil fuels are available, strategically investing in cleaner energy sources, preparing the Company to replace fossil fuels with newer, cleaner, renewable and cost-effective forms of energy.
‘Trading in greenhouse gas credits has begun and will gather momentum over the next two to five years. It is likely to be a significant market and BHP Billiton must gather as much intelligence as possible and continue to be as proactive as it has been.’
Dr Marcelo de Andrade, Chairman, Pró-Natura
Refer to the section on Our approach to understand how we address some of these concerns.
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