The world’s biggest mining company has spent £37m a year on climate change since 2007, and is confident of doubling its profits by 2030 despite the possibility of stringent new controls on greenhouse gas emissions.
BHP Billiton said on Tuesday that efforts to forge a new global agreement on climate change, at UN talks scheduled for Paris this December, would not harm its future profits, and anticipated continuing to mine for coal for decades to come.
The company made profits of nearly $14bn in the year to 30 June, 2014, but profits tumbled to nearly $2bn this year on the back of declining demand for key commodities. BHP produces a variety of commodities, including copper, iron ore, coal and gas.
At Paris, governments are hoping to sign a deal that would go some way to limiting global warming to no more than 2C above pre-industrial levels, which scientists say is the limit of safety, beyond which the effects of warming are likely to become catastrophic and irreversible.
Current pledges from governments on emissions cuts are unlikely to meet this goal, but they will require substantial reductions in future emissions, from both developed and developing countries.
BHP said its future planning involved “a range of scenarios”, including a 2C world, but also allowing for much greater levels of warming. The company predicted, in a report entitled Climate Change: Portfolio Analysis, that its assets would be largely unaffected by the changes to emissions levels. “BHP Billiton’s high-quality, low-cost energy coal assets have strong margins and therefore remain attractive despite the reduced demand,” the report found.
One of the key technologies identified by the company in allowing the world to continue to burn coal is carbon capture and storage (CCS), a technique by which carbon dioxide is captured at source - chiefly coal-fired power stations - and then piped underground into caverns for long-term storage. Though the technology has been mooted for more than a decade, there has not yet been demonstration of it at a large scale, and several attempted projects have foundered.
BHP’s chief commercial officer, Dean Dalla Valle , was unable to say how much funding the company had put into CCS development, out of the £37m devoted to low-carbon efforts. BHP also declined to make commitments on how much of its profits would be diverted into low-carbon technologies in future.
The company also intends to use “REDD+” – reducing emissions from deforestation and forest degradation – to offset its future carbon output, but has yet to purchase any such offsets.
Guy Shrubsole, climate campaigner at Friends of the Earth, said: “Whilst any investment in tackling climate change is welcome, BHP Billiton needs to be fundamentally changing its business model to leave fossil fuels in the ground. No amount of spin can hide the fact that the company is one of the world’s largest producers of coal, and that its corporate irresponsibility is cooking the climate.”
