Scope 3 emissions

Scope 3 emissions

Case Study: Scope 3 emissions

The National Greenhouse and Energy Reporting Scheme (NGER) and Greenhouse Gas (GHG) protocol define Scope 3 emissions as emissions that are generated indirectly because of activities from sources that are not owned or controlled by a reporting entity’s business.1 Leading mining industry bodies including the International Council on Minerals and Metals (ICMM) and the Mineral Council of Australia (MCA) support this definition.

It is estimated that 95 percent of total mining related emissions could fall into Scope 3, representing 20 percent of global emissions.2 These emissions typically fall out of a company’s direct control, (for example, metallurgical coal inputs into a steel mill). In Australia Scope 3 emissions are currently not included in the NGER scheme. Therefore at present a consistent methodology to report Scope 3 emissions in the mining industry does not yet exist.

In an attempt to provide greater transparency and reduce emissions, some mining companies, including BHP, Glencore, Vale, Rio Tinto, and Anglo American are taking a proactive approach to report and address Scope 3 emissions.

Vale has announced pathways to achieve a 25 percent reduction in scope emissions and has committed to reviewing its emission targets every 5 years.3 Three key strategies are enabling this change.

  • Shipping: Vale has committed to the International Maritime Organization’s emission targets which include a goal of reduction by 40 percent by 2030 and absolute emissions reduction of 50 percent by 2050

  • Steel blasting: Vale is moving towards a supply of mixed high-quality products to reduce energy demand in the steel blasting processes

  • Nature: Forestry protection covering over 1 million hectares and plans of additional 500,000 hectares by 2030

Glencore is also progressing Scope 3 emission reduction and targets a reduction of 30 percent by 2035.4 Glencore’s approach includes reshaping its portfolio to favour clean metals. This is demonstrated through their efforts to minimise coal production and expand commodities such as copper, cobalt, nickel and zinc, all of which aid in the utilisation of low emission technology such as renewable power.

Anglo American is currently targeting a reduction of Scope 3 emissions by 50 percent by 2040.5 The reduction of emissions will be supported in two key efforts:

  • Efficiency and control: across the entire supply chain, freight, and logistics, with a particular focus on shipping

  • Product and technology: changes to product portfolio and collaboration with global customers and technologies partners in an attempt to decarbonise the steel industry.

BHP focused efforts to address shipping and transport. By 2030, BHP target a reduction of chartered shipping emissions by 40 percent.6 The multinational is one of the founding members of the global Centre for Maritime Decarbonisation and in 2021 embarked on the first marine biofuel trial involving ocean vessel bunkering. (See section 7.1 of this report for further information.) Additionally, BHP is monitoring the energy efficiency and emissions related to charter vessels through a sustainability analytics platform which provides detailed emission insights and will be used as a tool to inform reduction measures.