Value chain (Scope 3) greenhouse gas emissions

Value chain (Scope 3):

In FY2022

Progressed our work supporting steelmaking and maritime industries to accelerate decarbonisation.

By 2030

Steelmakers: a goal to support industry to develop technologies and pathways capable of 30 per cent emissions intensity reduction in integrated steelmaking, with widespread adoption expected post 2030.

Shipping: support 40 per cent emissions intensity reduction of BHP-chartered shipping of BHP products.

By 2050

We’re pursuing the long-term goal of net zero Scope 3 GHG emissions by 2050. Achievement of this goal is uncertain, particularly given the challenges of a net zero pathway for our customers in steelmaking, and we cannot ensure the outcome alone.

To progress towards our 2050 goal²

We’re targeting net zero by 2050 for the operational GHG emissions of our direct suppliers³, and for GHG emissions from all shipping of BHP products. We will continue to partner with customers and others to try to accelerate the transition to carbon neutral steelmaking and other downstream processes.

Footnotes

¹ These positions are expressed using terms that are defined in the Glossary below, including the terms ‘target’, ‘goal’, ‘net zero’ and ‘carbon neutral’. The baseline year(s) of our targets will be adjusted for any material acquisitions and divestments, and to reflect progressive refinement of emissions reporting methodologies. The targets’ boundaries may in some cases differ from required reporting boundaries. The use of carbon offsets will be governed by BHP’s approach to carbon offsetting described at Carbon offsets and natural climate solutions.

² The targets are referable to a FY2020 baseline year. Our ability to achieve the targets is subject to the widespread availability of carbon neutral solutions to meet our requirements, including low/zero-emissions technologies, fuels, goods and services.

³ Operational GHG emissions of our direct suppliers means the Scope 1 and Scope 2 emissions of our direct suppliers included in BHP’s Scope 3 reporting categories of purchased goods and services (including capital goods), fuel- and energy-related activities, business travel and employee commuting.

Steelmaking

To support positive climate outcomes in both the near term and long term, we believe it is important to help enable our customers at whatever stage of the ‘steel decarbonisation framework’ they are in. This ‘steel decarbonisation framework’ is designed by BHP to describe the technology pathways to decarbonising the global integrated iron and steel industry (see the table below for more information). 

BHP’s customers in steelmaking are diverse, with some integrated steelmakers in the ‘optimisation’ stage, focused on energy and process efficiency, increasing scrap ratios and raw materials optimisation. Other customers are exploring ‘transition’ stage solutions like alternative fuels, modified blast furnace (BF) operations, and end-of-pipe solutions like Carbon Capture and Utilisation (CCU) and Carbon Capture, Utilisation and Storage (CCUS). Some companies are investigating the viability of ‘green end-state’ technologies, such as hydrogen-based direct reduction iron (DRI) with electric arc furnace steelmaking and direct electrolysis processes, like molten-oxide electrolysis.   

Our strategy to support steelmaking is to partner, innovate, advocate and supply the optimal products across these stages. Access by steelmakers to higher-quality metallurgical coal and iron ore products, which enables them to be more efficient and lower emissions intensity, is an important component of the transition to a low-carbon future. To support this, we are assessing the opportunity to implement beneficiation at our Jimblebar iron ore operation and metallurgical coal product improvements at our BMA operations. 

Across our partnerships with Tata Steel, POSCO, Baowu, JFE and HBIS, we are working with companies that represent approximately 13 per cent of reported 2021 global steel production capacity. BHP has also committed to invest more than US$75 million in research and development to support these partnerships and our decarbonisation framework. 

Maritime

Our strategy for supporting the maritime industry’s climate transition includes advocacy, adoption of low- and zero-emissions fuels or other efficiency technologies (like wind-assisted propulsion) and deploying real-time data analytics to optimise vessel and route selection to improve operational efficiency. For example, we continue our advocacy work with the Global Centre for Maritime Decarbonisation in Singapore, of which we are a founding member, we have formed a consortium with Rio Tinto, Oldendorff, Star Bulk and the Global Maritime Forum to analyse and support the development of an iron ore maritime green corridor, fuelled by green ammonia, and we are progressing use of LNG as a transitional fuel by chartering the world’s first LNG-fuelled Newcastlemax bulk carriers to transport iron ore from Western Australia to Asia from Eastern Pacific Shipping (EPS) for five years. 

Procurement

In order to engage and incentivise our suppliers, we integrated climate commitments into our sourcing document and evaluation criteria. We intend to continue to refine and integrate metrics related to incentivising positive climate outcomes from our suppliers going forward. 

Value chain (Scope 3) GHG emissions reporting

Our latest value chain (Scope 3) GHG emissions can be found in our Annual Reports and Scope 1, 2 and 3 GHG emissions calculation methodology available in the ‘sustainability links and downloads’ section below.