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Pathways to decarbonisation episode eight: The "brown-to-green transition"* – the multi-decade thematic for metals and materials

Huw
Dr Huw McKay

Vice President, Market Analysis & Economics

Lee Levkowitz headshot
Lee Levkowitz

Head of Energy, Carbon & Technology Research

Please refer to the Important Notice at the bottom of this article. 

At the simplest level, the brown-to-green (B2G) transition involves moving from an energy system that is fossil fuel and carbon-emission intensive to one that is not, and whose critical inputs include more sustainably produced metals and materials. That means moving from a world centred on the requirement for continuous combustion of non-renewable, carbon-emitting energy sources - in power plants, for buildings, in industry and for transport – to a world where we harness a range of renewable, low or zero carbon-emission energy sources for those same end applications. To complement the change in the narrow energy system, the world may also adopt complementary behavioural changes and technological strategies, such as the circular economy and carbon dioxide removal (CDR), to reduce primary demand and to help tackle the toughest residual greenhouse gas emissions. 

There is considerable uncertainty as to the precise combination of factors that will eventually achieve the B2G transition: but we have every confidence that the call on the metals and materials complex is likely to be immense.

Simply put, huge new value chains are rising, with a common upstream source: metals and materials.

We have partnered with BlackRock, the world’s largest asset manager**, to dissect the broad suite of challenges and opportunities that the B2G transition will entail for the metals and materials industries, while drawing out pertinent investment considerations. We share a core belief that while the energy transition is not without its physical, logistical, technological, behavioural and policy making challenges, the opportunities across the global economy are enormous. 

Allocators of capital can profitably accelerate change, in our view, by rewarding B2G leaders and providing the right mix of incentives for the laggards to go faster.

For the full paper published by BlackRock , please click the below link.

 

 

Forward-looking statements

In addition, the paper and this article contain forward–looking statements, which involve risks and uncertainties. Forward-looking statements include all statements, other than statements of historical or present facts, including (but not limited to) statements regarding global market conditions, reserves and resources and production forecasts; trends in the economic outlook and commodity prices; supply and demand for commodities; potential global responses to climate change; climate scenarios and other assumed long-term scenarios; the availability, implementation and adoption of new technologies; policy and regulatory developments; expectations, plans, strategies, and objectives of management; capital costs, operating costs and supply of materials and skilled employees; anticipated productive lives of projects, mines and facilities; and the potential effect of possible future events (including those that may affect the value of the BHP portfolio). 

Forward–looking statements may be identified by the use of terminology, including (but not limited to), “intend”, “aim”, “project”, “see”, “anticipate”, “estimate”, “plan”, “objective”, “believe”, “expect”, “commit”, “may”, “should”, “need”, “must”, “will’, “would”, “continue”, “forecast”, “guidance”, “trend” or similar words. These statements are based on the information available as at the date of the paper, this article and/or the date of BHP’s scenario analysis processes (as applicable). 

There are inherent limitations with scenario analysis, and it is difficult to predict which, if any, of the scenarios might eventuate. Scenarios do not constitute definitive outcomes for BHP. Scenario analysis relies on assumptions that may or may not be, or prove to be, correct and may or may not eventuate, and scenarios may be impacted by additional factors to the assumptions disclosed. Additionally, forward–looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties, and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in the paper or this article. 

BHP cautions against reliance on any forward–looking statements. Except as required by applicable regulations or by law, BHP does not undertake to publicly update or review any forward–looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance.

No offer of securities

Nothing in the paper or this article should be construed as either an offer or a solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, in any jurisdiction, or be treated or relied upon as a recommendation or advice by BHP. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.

Reliance on third party information

The views expressed in the paper and this article contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Neither the paper nor this article should not be relied upon as a recommendation or forecast by BHP.

BHP and its subsidiaries

In the paper and this article, the terms ‘BHP’, and any references to ‘we’, ‘us’ and ‘our’ or similar (where referencing BHP), refer to BHP Group Limited and, except where the context otherwise requires, our subsidiaries. Refer to Financial Statements note 30 ‘Subsidiaries’ in the BHP Annual Report 2023, available at bhp.com, for a list of our significant subsidiaries. Those terms do not include non-operated assets.  


* This term is used as a short-hand only to refer to the energy system transition described in the first paragraph of this article.
** BlackRock has the highest assets under management of any asset management firm, source: GlobalData and ADV ratings, August 2023.