What is blue carbon?

Blue carbon refers to the carbon trapped and stored in vegetated, coastal ecosystems, primarily mangroves, tidal marshes, and seagrasses. 

These coastal wetlands are efficient natural carbon sinks to help mitigate climate change, as they can be extremely efficient at removing carbon dioxide from the atmosphere and locking it away in the soil for millennia¹.

Projects to conserve and restore these coastal ecosystems are increasingly being recognised for the important role they play in mitigating climate change.

Blue carbon projects can also help local communities and First Nations people adapt to climate change, by delivering a range of non-carbon services including coastal resilience, biodiversity enhancement, nitrogen fixation, water storage and fisheries production².

Why should we care about blue carbon?

According to the World Research Institute blue carbon ecosystems remain one of the most threatened ecosystems on the planet and without our help could disappear globally within a century.  

The conservation, restoration or improved management of blue carbon ecosystems has the potential to be an effective natural climate solution that can help us mitigate CO₂ emissions and adapt to climate change (e.g. providing coast resilience to sea level rise).

Water is a global priority for the mining industry – it is a resource that we share with communities and the environment: a resource under increasing pressure from population growth, pollution, and climate change. That means we must do more – for the future of our business and the future of communities and the environments on which we all depend.

Responsible water management and protection of blue carbon ecosystems will ultimately make our business more resilient in the long term and positively contribute to an enduring environment and social value.

What is a blue carbon project?

A blue carbon project involves initiatives that seek to conserve and restore coastal ecosystems. This might include projects that plant seedlings to revegetate mangrove forests, remove tidal barriers, restore the natural water flow in coastal wetlands, or protect threatened seagrass meadows.

Recently in Australia, BHP partnered with Deakin University’s Blue Carbon Lab, Parks Victoria, and the Victorian Government to develop a collaborative blue carbon project dedicated to the restoration of more than 200 hectares of degraded coastal wetlands at the former Avalon saltworks site near Geelong, Victoria. 

Site of the former Avalon saltworks near Geelong, Victoria in Australia. 

This important blue carbon project will restore natural tidal flows in the area to provide protection for endangered shorebirds, enhance carbon capture within the coastal wetlands (“blue carbon”), and improve the health of Wadawurrung Country. This project will both showcase how to restore wetlands in Australia and directly act on climate change.

The restoration of this site builds on a wealth of pre-restoration science and the knowledge of Wadawurrung Traditional Owners, who have cared for Country for thousands of years. A dedicated research team will carefully monitor all stages of the restoration project to track both biodiversity and blue carbon benefits.

Restoration team on-site at Avalon, Victoria in Australia. 

Why invest in blue carbon projects?

Investing in the protection and restoration of coastal wetlands is highly effective natural climate solution. Coastal wetlands can help us lock carbon and mitigate our carbon footprint, while providing a range of services that will also help us adapt to the impacts of climate change. For example, mangrove forests increase our resilience to sea level rise and extreme weather events by stabilising the coastline and reducing the strength and height waves. In addition, they can provide food and livelihoods to coastal communities, enhance wildlife biodiversity, and provide recreational opportunities (like birdwatching and kayaking).

Investing in blue carbon projects can contribute to the mitigation of corporate carbon footprints, but more importantly it directly contributes to the conservation of coastal ecosystems. 

How can companies incorporate blue carbon into sustainability goals?

Corporations, governments, and organisations are increasingly recognising the role of blue carbon ecosystems in supporting their climate transition.

In the mining industry it is acknowledged that carbon credits are likely to be needed to offset hard-to-abate greenhouse gas (GHG) emissions with limited or no technological solution, in a temporary capacity as abatement options are being studied, or to ensure compliance with local or regional GHG emission pricing schemes.

In Australia, the Clean Energy Regulator now allows for the generation of Australian carbon credit units (ACCUs) in projects where the restoration of tidal flow leads to the establishment of coastal wetlands. 

ACCUs are a tradable financial product, with one ACCU representing one tonne of carbon dioxide equivalent (tCO₂-e) that gets stored or avoids being emitted.

For tidal restoration projects, carbon abatement will include all the carbon removed and captured in the wetland soil and vegetation, plus all the carbon emissions avoided by re-introducing tidal flow. 

Over time we may see removal carbon credits become an increasing proportion of BHP’s carbon crediting portfolio, compared to avoidance carbon credits, as more sectors take action to make the transition to a low-carbon economy. 

What are the barriers to scaling blue carbon projects?

According to the Financing Blue Carbon in Australia report, blue carbon projects frequently face significant initial and operational expenses, making economic sustainability a major challenge. As a result, securing funding whether from philanthropic sources, industry partners, or government entities is critical to kickstart large-scale blue carbon projects in Australia. Additional income generated from trading non-carbon benefits (like biodiversity credits) could offer extra support for blue carbon projects. However, there are currently no viable environmental markets currently in Australia³.

In 2022, BHP launched a new A$5 million grants program to help drive the development of the Australian blue carbon market by providing funding and support to emerging blue carbon projects. BHP’s Blue Carbon Breakthrough Grant Program supported shovel-ready projects and BHP’s Blue Carbon Enabler Program supported a variety of blue carbon projects in their incubation stages. 

This program builds on the A$3.3 million research program, launched in 2021, by BHP and CSIRO, Australia’s national science agency, to measure and quantify the net emissions reduction potential of Australia’s mangroves, seagrasses, and tidal marshes.

¹ CSIRO (2022), Australia’s carbon sequestration potential; https://www.csiro.au/en/research/environmental-impacts/emissions/carbon-sequestration-potential

² Davis et al, (2023), Investigating the potential for a blue carbon economy on Australia’s northern coastline; DCCEEW, (2022), Coastal Blue Carbon Ecosystems.

³ CSIRO Report: Financing Blue Carbon in Australia, https://www.bhp.com/-/media/project/bhp1ip/bhp-com-en/documents/sustainability/climate-change/finaldraft-pollinationreport-financingnon-carbonbenefitsofbluecarboninaustralia_hr.pdf