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Marion Rae

Investors query coal leader's climate change trajectory

Fresh research queries coal leader Glencore's plans in light of Paris Agreement emissions targets. (Dave Hunt/AAP PHOTOS) (AAP)

The world's biggest coal trader is under pressure to show how its operations and "reckless" Australian plans align with the Paris Agreement on climate change.

A shareholder advocacy organisation on Wednesday released research showing Glencore's forecast emissions from coal production are at odds with its public pledges to help limit global warming to 1.5C.

The company is Australia's largest coal producer, with 17 mining operations across NSW and Queensland.

"Glencore's ability to reach its own target of a 50 per cent reduction in emissions by 2035 is achieved with the assistance of beneficial carbon accounting, making its emissions reductions appear more significant," the Australasian Centre for Corporate Responsibility research report said.

The report also cast fresh doubt on Glencore's future development of the Wandoan coal mine in southwest Queensland.

Glencore's open-cut Wandoan coal mine has been on hold since 2013, but its Surat hydrogen project near Wandoan is examining using coal to produce liquid hydrogen and ammonia as low-emission alternative fuels.

Glencore has also been a long-term supporter of contentious carbon capture and storage technology (CCS) for storing industrial emissions deep underground.

"If Wandoan goes ahead, it's likely to become a stranded asset," said Michael Wyrsch, chief investment officer and deputy CEO at Australian superannuation fund Vision Super.

"And the plans for offsetting it using carbon capture and storage are at best unproven and possibly reckless," he said.

He said Glencore needs to bite the bullet on Wandoan and start focusing on growth that will benefit shareholders, not coal projects that will diminish shareholder value and contribute to the planet becoming uninhabitable.

The researchers found while Glencore says it is exploring the potential to reduce emissions associated with Wandoan coal by using CCS, to fully sequester all its emissions would require more CCS capacity than in the pipeline for coal-related capture across the entire globe in 2030.

A shareholder resolution filed by institutional investors and ACCR calls on Glencore to explain, and is due to be voted on in May.

"The research published today by ACCR provides additional context as to why we seek further disclosure from Glencore on their thermal coal production plans," environmental, social and governance analyst Dror Elkayam said.

"In particular, it outlines the potential misalignment between the company's exposure to coal and the 1.5 degree trajectory, which we request more clarity on," he said.

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