Andrew Mackenzie, CEO, BHP Billiton
Peking University Education Foundation launch
Peking, China, 6 June 2016
Thank you Dr Li Yansong for your kind introduction.
I too wish to acknowledge Peking University President, Professor Lin Jianhua, Director General of the National Centre for Climate Change Strategy, Li Junfeng, Australia’s Ambassador to China, Her Excellency Jan Adams, and special guests, ladies and gentlemen.
It's a real pleasure to be here. I appreciate your hospitality and the opportunity to speak today.
There is little doubt that climate change presents many challenges and opportunities and demands a decisive response.
We acknowledge the significant step that China took in Paris last year when the nation committed to achieving peak carbon dioxide emissions by approximately 2030 or sooner and to lower carbon dioxide emissions per unit of GDP from 2005 levels by between 60 per cent and 65 per cent. This commitment is a genuine contribution to addressing the global issue of climate change and for that China must be recognised.
BHP Billiton has a very clear position on climate change. We accept the IPCC’s assessment of climate change science which has found that the climate’s warming is unequivocal, the human influence is clear and physical impacts are unavoidable.
However, power demand and CO2 intensive manufacturing (in areas such as steel and cement) will also increase as the global population grows, urbanises and living standards improve.
By 2030 an additional 1.8 billion people will have gained access to electricity for the first time. The International Energy Agency forecasts that by 2040, 75 per cent of global energy will still be supplied by fossil fuels.
Together we share the challenge of how to continue to provide affordable energy and basic resources while limiting climate change.
BHP Billiton is a company with an intergenerational perspective on our industry, the communities we operate in and the planet that we inhabit. Intergenerational thinking means doing the right thing today to maximize prosperity for many decades - if not centuries.
Intergenerational thinking demands that we must look at a number of approaches to greenhouse gas reduction particularly those with the potential for meaningful reductions.
Debate that centres on making one fossil fuel appear more climate friendly than another misses the point! Fossil fuels (coal, gas, oil) will remain a part of the energy mix for the foreseeable future.
Emissions activity from steel production will also continue to be substantial, and in many cases there are no immediate alternatives for replacing key ingredients such as metallurgical coal.
So we must think to solutions that address the carbon emissions we are forecast to produce in power production and industrial activity. Many of these solutions will be technological. One technology that promises an enormous payoff, if we can get it right, is carbon capture use and storage. Or ‘CCS’ as we like to call it.
CCS is a key technology that has the potential to deliver large-scale reductions from industrial activities. China is taking CCS seriously. While North America may have more operational CCS projects, China leads the way in the planning and development of large scale CCS projects.
Should CCS become commercially proven, it could become a significant industry for China. One that rivals other industries!
While we believe that the technology is ready, policies are needed to support the development and deployment of CCS. Policies such as CO2 storage and transport regulation that lay the foundation for the growth of a CCS industry.
China’s national emissions trading scheme for 2017 is a great example of a policy that will have a positive impact on CCS economics deployment. When government works collaboratively with industry, a cost-effective step-change can be made.
And so what is BHP Billiton doing about this? As one example we have formed a partnership with SaskPower in Canada, the developers of the Boundary Dam CCS Project – the world’s first CCS project at a power station.
The partnership will establish a Centre to facilitate knowledge sharing and to form technology development opportunities with others. We have already seen significant interest for those who wish to learn and engage and we expect that the Centre will actively collaborate here in China, particularly in the power sector.
We also see a role for BHP Billiton in working with your industry participants and institutions to accelerate CCS in the industrial sector (particularly in steel), where China plays such a prominent global leadership role. And that’s why we are here today!
On behalf of BHP Billiton, I am delighted to announce a $7 million dollar relationship with Peking University. We hope this contribution will help Peking University further build CCS knowledge capacity and address the technical, policy and economic barriers to CCS in the steel sector, in China and around the world.
This investment further demonstrates BHP Billiton’s commitment to the future of the steel industry and CCS globally. It’s also an example of using technology, project economics and policy to address environmental priorities.
Our announcement today is a necessary first step to get the fundamentals right and accelerate CCS development and deployment.
We are also hopeful this work could hasten both pilot scale and commercial scale CCS projects and we look forward to working together with our customers and markets in China and around the world to make this a reality.
Of course, innovation is nurtured through our universities. It is vital that creative minds are developed while problems are addressed to make sure the world will be well served for the future.
Our announcement today to partner with Peking University to develop solutions to climate change, is recognition of the calibre of your institution as a genuine centre of learning for the world and the strength of international collaboration. We are very proud to have worked with you for over ten years and look forward to continuing our relationship.
Government, business and academia must work together to deliver solutions to the difficult questions. Together we can grow our economies and see our scholars, academics, engineers, economists and managers deliver solutions to the world’s challenges!
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For more information please see the media release.