(Bloomberg) -- Glencore Plc, the world's biggest shipper of thermal coal, has mapped out cuts in carbon emissions generated by its customers as the company slowly retreats from the dirtiest fuel.
The world's biggest resource companies, from miners to oil majors, are under increasing pressure to account for the pollution created when their customers burn or process the materials they produce.
Glencore said on Tuesday its so-called Scope 3 emissions will fall by 30% in the next 15 years, predominantly as a result of depleting mines in Colombia and South Africa. That's a projection based on its current mine plans, rather than a fixed target. Glencore did not say how much coal production would be cut to meet the projection.
| What are the different kinds of emissions? |
|---|
|
Glencore has faced the brunt of a growing investor concern about climate change. While its biggest rivals are in the process of exiting coal, Glencore has been a staunch defender of the fuel, saying it's essential to providing affordable and reliable power in developing countries.
Still, the commodity trader's billionaire chief executive officer, Ivan Glasenberg, has been forced to make concessions to keep investors. Last year, Glencore agreed to cap coal production, albeit above its current output level.
The mining industry has yet to find common ground on how to deal with scope 3 emissions. BHP Group in July called on the mining sector to take ownership of emissions that result from product sales, a stance that's been rejected by some rivals who argue it's too difficult to calculate a supplier's share. Rio Tinto Group is partnering with a Chinese steelmaker to develop methods to cut pollution and improve the steel industry's environmental performance, while Vale SA has said it will develop ambitious targets to cut Scope 3 emissions.
Arguably, the Scope 3 emissions of the oil industry are even more difficult to calculate. That hasn't stopped companies like Repsol SA and BP Plc from setting net-zero emissions targets for all the oil and gas they extract and their customers burn.
Glencore said the reduction in emissions will derive mainly from its Colombian coal assets, and to a lesser extent from its South African and Australian mines. The Colombian market is currently under pressure as it predominantly ships to Europe where countries are cutting their use of the fuel, while South Africa has challenges with labor relations and government policies.
Why ‘Scope' Matters for Oil Companies Cutting Carbon: QuickTake
“Our capital expenditure reflects significant current investments towards growth in production of battery and conductive materials required for the transition to a lower carbon economy,” Glencore said in the statement.
--With assistance from Akshat Rathi.
To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Dylan Griffiths, Nicholas Larkin
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
