Carbon Pricing Polices Gaining Traction
Support for an international carbon pricing scheme to help achieve emissions reductions and limit global warming is mounting among Australia’s mining and energy heavyweights.
Carbon offsets would be a major step towards meeting emissions targets at the lowest global cost, as part of a suite of reforms to address climate change, according to Woodside Energy CEO and managing director Peter Coleman.
Speaking at the Melbourne Mining Club last month, he said this was the industry’s biggest challenge and it was time for all stakeholders to step-up, provide leadership and take action.
“Without a global carbon price, we are stuck with a patchwork of national approaches, loosely coordinated under the Paris Agreement,” he said.
“This risks a perverse outcome where the lowest cost of reliable supply into the market remains the greatest emitter of carbon, offsetting the benefits renewables offer.”
Mr Coleman said along with carbon offsets, new methods of energy generation were vital to ensure economic competitiveness and job protection.
He said governments needed to incentivise development of lower-carbon energy sources, including renewables, and provide certainty for industry to pursue these. But he stressed that demand would also be market-driven.
“We are (already) seeing commercial pressure emerging from Woodside’s customers in Japan and Korea,” he said.
“They are encouraging us to develop hydrogen power as a carbon-neutral energy source that can ultimately be derived from renewable resources.”
Woodside is the latest in a string of Australia’s big mining and energy companies starting to throw some muscle behind an international carbon pricing system and energy market reform.
Last month, Rio Tinto boss Jean Sebastien Jacques reiterated his company’s support for putting a price on emissions.
BHP has also made it clear it supports a carbon price as part of a long-term, effective response to climate change.
Speaking at the Greenhouse Gas Control Technologies forum in Melbourne in October, BHP sustainability and climate change vice president, Fiona Wild, said the company had ‘always been really clear that we support a carbon price’.
She said BHP would like to see a well-integrated climate and energy policy that considered affordability, reliability and emissions reductions.
BHP’s climate change strategy focuses on reducing operational greenhouse gas (GHG) emissions, investing in low emissions technologies, promoting product stewardship, managing climate-related risk and opportunity, and working with others to enhance the global policy and market response.
Fortescue Metals Group (FMG) has backed a carbon price, or tax, as a means to help address climate change issues.
The company applies a price on carbon for new greenfields sites when assessing power supply options and potential energy infrastructure projects.
Like many miners, FMG has set short and longer-term emission intensity targets and is investigating opportunities to reduce emissions in its daily operations.
When announcing half-yearly 2018 results this year, Origin Energy chief executive officer Frank Calabria said his company was continuing to take steps towards a cleaner and smarter energy future.
“Our commitment to halve carbon emissions by 2032 signals our intention to shift to a cleaner energy portfolio,” he said.
“This is one in which renewables and gas feature strongly, alongside a range of new technologies that will enable more efficient use of energy in homes and on a utility scale.”
AGL Manager of Greenhouse and Sustainability, Theo Comino, told the 2018 City of Sydney ‘Towards Carbon Positive’ event his company was investing in new renewable and near-zero emission technologies.
AGL is working on distributed renewable generation, battery storage and advocating for long-term policies aimed at reducing Australia’s emissions.
These big energy and mining players have consistently called for all industry stakeholders to consider the policies and contributions they can make, individually and collectively, to help mitigate the effects of climate change.
At the recent Melbourne Mining Club meeting, Mr Coleman said Australia was right on the doorstep of the world’s fastest growing markets and needed policies that provided certainty for investment decisions as the country competed for global capital.
“This is necessary to unlock the full value of our resources for the Australian people,” he said.
“Australia’s financial system will likely never be big enough to support the capital required for massive resource projects and the country will always have to attract funding from foreign sources.
“If we are to have a chance of transitioning to a lower carbon economy, large and experienced companies like ours will play a crucial role.
“These companies employ thousands of people and are capable of building large facilities and running complex operations.
“But we take risks and need appropriate returns, so we need certainty from government – the sort of certainty that only comes from a bipartisan approach.”