{"id":533698,"date":"2026-07-09T22:04:11","date_gmt":"2026-07-09T22:04:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/533698\/"},"modified":"2026-07-09T22:04:11","modified_gmt":"2026-07-09T22:04:11","slug":"former-top-bhp-economist-urges-tougher-government-policies-to-push-miners-to-decarbonise-bhp","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/533698\/","title":{"rendered":"Former top BHP economist urges tougher government policies to push miners to decarbonise | BHP"},"content":{"rendered":"

A former chief economist at mining company BHP<\/a> says stronger climate policy by governments is needed to \u201cmove the needle\u201d and incentivise tough decarbonisation decisions at major resource companies.<\/p>\n

Internal documents, leaked to Guardian Australia<\/a> and the ABC earlier this year, showed BHP had delayed vast renewables projects in the Pilbara, scrapped a project that would have delivered significant cuts to global emissions, and war-gamed options to push the electrification of its polluting diesel truck and train fleets<\/a> into the next two decades.<\/p>\n

Experts and analysts have previously said the slowdown in BHP\u2019s decarbonisation progress put Australia\u2019s broader climate targets at risk and exposed significant flaws in a key climate policy, the safeguard mechanism<\/a>.<\/p>\n

Former BHP chief economist Dr Huw McKay, now a visiting fellow at Australian National University\u2019s Crawford school of public policy, told the Guardian that stronger climate policy was needed to drive urgent action.<\/p>\n

McKay, who left the company in 2024, said he agreed with the distinguished economist and emeritus professor Ross Garnaut, that voluntary commitments from companies on decarbonisation were unstable<\/a> and strong government policy was needed.<\/p>\n

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\u201cThat\u2019s absolutely right,\u201d he said. \u201cThe preferred policy is, of course, a carbon price that is calibrated to move the needle on hard-to-abate emissions.<\/p>\n

\u201cInserting a carbon-price obligation like that into the investment process at major resources companies would lead to swifter action.\u201d<\/p>\n

McKay will this month speak at an ANU seminar on \u201cHeavy industry decarbonisation: insights from the BHP leaks\u201d. The description of the event<\/a> says he will speak about how \u201ccorporate goals and targets are set, the role of broader investment and capital allocation processes, and the influence of policy, financial, and operational environments on decision-making\u201d.<\/p>\n

BHP has set itself a target of cutting emissions to 30% below 2020 levels<\/a> by 2030, which it has already achieved using power purchasing agreements, particularly in Chile, and through the 2024 suspension of its struggling Western Australian nickel operations. But its longer-term net zero goal requires it to make significant emissions reductions from its mining operations, which can be achieved by transitioning away from its diesel fleet and transforming its inland power grid, which is currently powered by gas and diesel generation.<\/p>\n

\"BHPBHP files: leaked memo shows miner backtracking on key climate projects in Australia \u2013 videoBowen defends current regime<\/p>\n

The climate change, Chris Bowen, has defended the current \u201csafeguard mechanism\u201d, which requires about 200 big industrial emitting sites \u2013 including several BHP facilities \u2013 to cut emissions intensity year-on-year, either onsite or by buying contentious carbon offsets.<\/p>\n

Bowen said the safeguard mechanism did not rely on voluntary commitments. He said it mandated each large facility covered to cut emissions each year and to reach net zero by 2050.<\/p>\n

Government data released earlier this year said total onsite emissions covered by the scheme were down 2.3% this year<\/a>.<\/p>\n

\u201cWe won\u2019t be imposing a carbon tax,\u201d Bowen said.<\/p>\n

Quick GuideWhat is the safeguard mechanism?Show<\/p>\n

Australia\u2019s safeguard mechanism requires the country’s largest polluting industrial facilities to cut their greenhouse gas emissions intensity year on year.<\/p>\n

It applies to about 200 facilities that each year emit more than 100,000 tonnes of carbon dioxide, or the equivalent in other greenhouse gases. These include mines, gas facilities, processing plants, smelters and manufacturers.<\/p>\n

Facility owners can make cuts onsite or by buying carbon offsets.\u00a0<\/p>\n

The policy was introduced in 2016 by the rightwing Coalition government with a promise it would stop industrial emissions increasing. But it was not applied as promised and total pollution from the sites continued to rise.<\/p>\n

The Albanese Labor government revamped the scheme in 2023, setting new emissions limits, known as baselines, for each facility.<\/p>\n

Under the changes, facilities are required to reduce emissions intensity \u2013 the amount of pollution per unit of production \u2013 by up to 4.9% a year. Companies can choose whether they make direct cuts or buy carbon offsets to meet their reduction obligations.\u00a0<\/p>\n

They have access to two different types of carbon credits to offset their pollution. They can buy Australian carbon credit units, which are created through government-approved projects said to draw CO2 from the atmosphere or prevent its release.\u00a0<\/p>\n

Or they can also use “safeguard credits”, which are created when a facility emits less than its safeguard baseline. The owner gets one safeguard credit for every tonne of CO2 they are below their baseline. These within-scheme credits can be sold to other polluting facilities that emit more than their baseline and need offsets.<\/p>\n

New polluting facilities, including gasfields and coalmines, are allowed to open and enter the scheme with baselines set at \u201cinternational best practice\u201d. For new gasfields, that means offsetting all CO2 pollution so they are net zero.<\/p>\n

A deal between Labor and the Greens introduced an absolute “cap” so that total emissions under the scheme need to come down over time. The pace of reduction was not stipulated under the deal and is set by the climate change minister.<\/p>\n

Thank you for your feedback.<\/p>\n

The leaked BHP documents revealed how the company had repeatedly balked at making major investments in decarbonisation initiatives, despite publicly describing climate change as an \u201cexistential\u201d risk to the world and internally acknowledging that urgent emissions reductions efforts effectively underpinned its \u201clicence to operate\u201d.<\/p>\n

Energy minister Chris Bowen defends the safeguard mechanism, saying \u2018We won\u2019t be imposing a carbon tax.\u2019 Photograph: Lukas Coch\/AAP<\/p>\n

The company\u2019s first inland Pilbara decarbonisation project \u2013 a 50MW solar farm and 20MW battery at its Jimblebar mine \u2013 was shelved after being approved and funded<\/a> by the board. Another 500MW system of solar, wind and battery was significantly delayed. The company has continued to acquire 62 polluting diesel haulage trucks<\/a>, despite pledges to electrify its highly polluting fleet as early as 2027-2028.<\/p>\n

In the weeks after the revelations, BHP engaged in a concerted public relations push to promote a trial of two battery-electric trucks<\/a> in the Pilbara. An event held by the company, along with Rio Tinto and Caterpillar, was attended by the press and the Western Australian premier, Roger Cook. An invitation to journalists said that \u201cflights and transport to site are included\u201d, although WA government officials were not provided with transportation by BHP.<\/p>\n

The event was held at its Jimblebar mine site. Critics say BHP was simply re-launching a previous announcement about the trial of battery-electric haul trucks.<\/p>\n

In a statement, a BHP spokesperson said trials were needed because technology was not advanced enough to scale 240-ton battery-electric haul trucks to an operational fleet.<\/p>\n

\u201cTo support the acceleration of this technology, BHP is partnering with equipment producers to run trials of battery-electric equipment including two 240-ton battery electric haul trucks being trialled on a BHP site in the Pilbara, and four battery-electric locomotives which we plan to commence trialling in coming months,\u201d the spokesperson said.<\/p>\n

\u201cBHP continues to focus on delivering our operational emissions reduction target and long-term net zero goal, including support to accelerate and de-risk the required technology, noting that announced commitments by some companies to acquire new equipment in the future does not mean such equipment currently exists.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A former chief economist at mining company BHP says stronger climate policy by governments is needed to \u201cmove…\n","protected":false},"author":2,"featured_media":533699,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46],"class_list":["post-533698","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/533698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=533698"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/533698\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/533699"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=533698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=533698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=533698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}