BHP embraces emissions reduction innovations in shipping industry 2019

BHP embraces emissions reduction innovations in shipping industry

Shipping is one of the largest emitters of greenhouse gases (GHG) in BHP’s value chain. While biodiesel, methanol and battery-powered dry bulk vessels have the potential to reduce future emissions, liquefied natural gas (LNG) is capable to delivering emissions reductions now.

Introducing LNG-fuelled ships into BHP’s maritime supply chain can eliminate NOx (nitrogen oxides) and SOx (sulphur oxides) emissions and significantly reduce CO2 emissions along the world’s busiest bulk transport route.

In July 2019, BHP released the world’s first bulk carrier tender for LNG-fuelled transport for up to 27 million tonnes or 10 per cent of our iron ore.

The tender is open to ship owners, banks and LNG fuel network providers. As well as LNG-fuelled transport, it also seeks other innovative solutions that can lower GHG emissions and increase freight productivity.

Supporting the creation of an LNG-fuelled fleet and infrastructure will help BHP and others reduce emissions while other sources of renewable energy are under development. This will help meet the targets set by the International Maritime Organisation for a 50 per cent reduction in GHG emissions from international shipping by 2050 (from 2008 levels).

BHP recognises we have a stewardship role to play in our value chain, working with customers, suppliers and others to reduce emissions across the full life cycle of our products.

BHP has collaborated on other industry-wide initiatives to reduce emissions in the shipping industry, such as the development of the RightShip GHG emissions rating and a trial of marine biofuel.

Our collaboration with RightShip, a leading maritime risk management and environmental assessment organisation equally owned by BHP, Rio Tinto and Cargill, has developed a method for measuring a vessel’s GHG emissions.

This involved establishing a practical GHG emissions rating system, on a scale from A to G, based on the Existing Vessel Design Index to better measure and compare vessel emissions performance.

As part of our commitment to sustainable shipping, BHP has not chartered any vessels with the lowest GHG ratings (F and G) since FY2018.

BHP is one of 62 charterers using the RightShip GHG Rating system to promote the use of more efficient vessels across the industry.

The International Maritime Organisation has set a target for a reduction in GHG emissions of 50 per cent by 2050 (from 2008 levels). The shipping industry has responded, with around one vessel a day upgraded or retrofitted to improve fuel efficiency. This has resulted in GHG emissions reductions of up to 20 per cent, with some reporting fuel efficiency increases of close to 40 per cent.