Up is not down: BHP in spotlight as epic decarbonisation walk-back revealed

A major expose on ABC Four Corners last night, in collaboration with The Guardian, revealed for the first time irrefutable evidence of BHP reversing its commitments to meaningfully cut emissions in a credible timeframe at its world-dominant Pilbara iron ore business.

The egregious walk-back, as the climate crisis escalates, was laid out in hundreds of pages of leaked internal company records. 

We’ve been saying it for years – BHP’s record of (in)action on clean energy and climate is pathetic and an indictment of its board and CEO leadership. And there it was in black and white.

What BHP does matters. It is the world’s largest mining company by market capitalisation, generating revenues of US$51bn in the last financial year with underlying earnings of US$26bn and a US$18bn pre-tax profit to its shareholders.

To achieve this, BHP spewed 8.7 million tonnes of greenhouse gas emissions in FY2024-25. As the Guardian pointed out: more than 80 individual nations.

Andrew Mackenzie, BHP’s CEO until 2019, said publicly that decarbonisation was a strategic imperative, with failure to act posing an existential risk.

Its Pilbara decarbonisation plans were urgent and comprehensive, and involved rapid electrification of locomotives and haulage trucks, and a massive buildout of solar to reduce diesel and gas dependence.

It had plans to deploy US$3bn in decarbonisation investment by 2030 to underpin its climate targets and secure its licence to operate.

Then it all went to the proverbial. 

BHP shelved its board-approved 50MW solar and 20MW battery project at the huge Jimblebar mine shortly after its 2023 funding approval, sparking internal staff backlash.

A planned massive 500MW hybrid power project – enough to power a small city – will not proceed in its current form and is denied funding until at least 2031, missing its initially targeted 2027 start.

A proposed iron ore processing facility, designed to produce higher purity ore for steelmaking, was quietly dumped.  It could have cut global emissions by 1.7 million tonnes annually.

And despite plans to trial electric haulage trucks, BHP is investing in massive new fleets of heavily polluting diesel vehicles – the key contributor to its emissions profile – including a $500 million purchase for Jimblebar and planned use at its new Ministers North mine. This fleet could remain operational through 2040.

In 2024, CEO Mike Henry introduced BHP’s Climate Transition Action Plan (CTAP), which sounds great except for it being entirely hollow. BHP massively delayed its entire decarbonisation trajectory until after 2030 – trashing its stated intention to address climate risk and abrogating its corporate responsibility to act in this critical decade. 

Astonishingly, the “plan” forecasts BHP’s global emissions will rise from FY2025-FY2030. Up is not down. There is currently categorically zero chance of BHP’s plans meeting its net zero by 2050 commitment.

Meanwhile, in the knowledge that this story was coming, BHP and associates have been vigorously cranking up the spin machine.

A curiously timed pamphlet, released last week by economics consultancy Mandala, which has close ties to the PMO, breaks down top 20 ASX listed industrial corporates’ global scope 1 and 2 emissions profiles in FY2025 vs FY2020, conveniently pitching BHP as a corporate leader.

BHP then mounted an ad campaign trumpeting the trumped-up claims. There is no mention of who funded the conveniently timed Mandala brochure.

To call Mandala’s brochure misleading is generous. It primarily relies on the electrification of BHP’s huge Chilean copper mining operations and obscures BHP’s complete dereliction of its responsibilities in the Pilbara, with much of BHP’s Australian emissions reductions from the closure of its nickel assets in WA.

Production-based emissions intensity would tell a different story on BHP’s progress, and that of other giants like Rio featured by Mandala – despite the coordinated reporting in The Australian engineered to promulgate the Mandala talking points while bashing genuine decarbonisation leader Fortescue.

Why the heel dragging by BHP? Follow the money – the hundreds of millions paid to the big miners each year by the federal government to maintain their imported diesel addiction. 

In Australia, BHP extracts from the taxpayer a $620m annual imported diesel refund covering the staggering 1.2 billion litres of this climate-destroying fuel it uses each year in its mining operations.

Diesel powers more than 60% of BHP’s total energy needs. This dependency undermines our national energy independence, which requires an accelerated transition to homegrown renewables, and continues to put Australia’s energy security at risk.

It persists in an increasingly fraught global geopolitical landscape riven by energy wars – see PM Anthony Albanese begging our trade partners for supply as the global oil supply shock rolls on.

And BHP is the #1 beneficiary of this insane structural barrier to mining industry decarbonisation and the resulting massive opportunities for onshoring of green industry and reskilling of our workforce. 

Highly coincidental too that Aaron Morey, chief of WA’s mining lobby, the Chamber of Minerals and Energy, published a fact-light op ed in AFR in the days preceding the Four Corners/ Guardian exclusive, warning against any change to the diesel refund.

Morey doubled down on his commentary on Four Corners, asserting that the technology required to run fully electrified haulage fleets at scale simply does not exist yet.

Morey faithfully echoes BHP, which spuriously claims that the technology for decarbonisation and electrification is not ready. This is patently false. BHP bragged that in 2022 it fully decarbonised its Chilean mining operations via renewable energy PPAs and electrification.

Its counterpart Rio spouts the same BS, with CEO Kellie Parker claiming the technology for diesel replacement isn’t commercialised. Yet Rio’s gargantuan US$23 billion Guinea Simandou iron ore operation is commercially deploying EV mining trucks from China’s XCMG today. Woeful.

Meanwhile, Fortescue is investing US$6-7bn this decade in electrification, decarbonisation and energy security in the Pilbara – a world leading effort to position Australian iron ore mining at the forefront of emissions reduction.

It is partnering with the best cleantech firms in the world, who happen to mostly be domiciled in China – Australia’s #1 trade partner and biggest iron ore customer. In so doing it is building important geopolitical bridges for Australia even as world trade is undermined by the US. 

Despite being a leading beneficiary of the diesel subsidy, Fortescue is a vocal advocate of urgent reform, as demonstrated by CEO Dino Otranto on Four Corners last night.

Fortescue supports CEF’s position that the subsidy should be capped at $50m per firm pa, with recipients required to invest any refund above that threshold in decarbonisation, or forgo that amount.

This reform would convert a massive headwind to energy transition in mining to a Transition Tax Incentive, instantly accelerating decarbonisation and enabling Australia to grasp the immense green industrial opportunities of the emerging net zero global economy.

A tightening of the Safeguard Mechanism is also key to incentivising decarbonisation, with a progressive ratcheting up of minimum Australian Carbon Credit prices, to make polluters like BHP meaningfully cut emissions or pay.

The facts are that BHP, like Rio, Hancock Prospecting and Fortescue for the past 6 years have tapped into literal rivers of gold from their iron ore exports, booking return on capital ranging from 30% pa up to 70% pa.

BHP’s FY2025 results for WA iron ore cite a “5 year average return of ~65%”, which any company would kill for. They have the capital firepower to massively invest, accelerate electrification and decarbonisation of the Pilbara now as Fortescue is doing, and lead the world.

Yet they sit on their hands. The region has a dismal renewable energy penetration of just 2% versus 44% for Australia’s national grid. Hancock’s owner outright rejects the climate science. BHP and Rio give lip-service as they hoard the bullion.

We need an end to the Big Australian’s gutless reversals on climate, cheap talk and abysmal underinvestment in Australian decarbonisation.

Equally, we need an urgent show of political courage from the government to decouple BHP and its counterparts from the firehose of diesel cash they have clamped themselves to at the expense of the people and the planet.