BHP withdraws support for Australia’s use of carryover credits to meet emissions target | Business


Mining giant BHP has reversed its position on Australia’s use of carryover credits to meet global greenhouse gas emissions targets, saying in a review of the company’s memberships of industry groups that it does not support their use.

The major miner published a new set of standards on Friday morning, covering its memberships of industry associations and lobby groups and how they advocate on climate change policy.

The emissions minister, Angus Taylor, said in July that Australia had beaten its emissions target under the previous Kyoto protocol by “up to 430 million tonnes”.

Australia wants to use these credits to make it easier to meet its targets under the Paris climate agreement but the move has been widely condemned, with some countries accusing Australia of “cheating” while one group of experts said there was no legal basis to use the credits.

Australia’s target under the superseded Kyoto Protocol was to allow an 8% rise in emissions between 1990 and 2010. A second period saw a target to cut emissions by 5% below 2000 levels by 2020.

BHP has also asked that industry groups it is a member of – including the Minerals Council of Australia, the Australian Petroleum Production and Exploration Association and the Business Council of Australia – publish annual plans outlining their advocacy positions on climate change.

In September 2019, BHP’s then chief executive, Andrew Mackenzie, reportedly told investors that he supported the use of the carryover credits. Mackenzie retired at the end of 2019 and was replaced by Mike Henry.

The company also said it would disclose in “real time” if it found one of its major industry associations had “materially departed” from a new set of global climate policy standards.

In a section on “guiding principles”, BHP said advocacy on climate should prioritise areas that would be the greatest benefit to communities and avoid areas that “may be seen to unduly exacerbate policy tensions.”

The document adds: “As an example, there should not be advocacy on issues such as the use of ‘Kyoto carryover credits’.”

Internationally, the new BHP standards say all climate policy advocacy should be underpinned by the goal to keep global heating to well below 2C “and pursue efforts to limit the temperature increase to 1.5C”

BHP said Australia should “focus on achieving net zero global emissions by 2050” while policies should be “least cost”.

Any advocacy from industry groups it was a member of should also “aim to support the development and deployment of pre-commercial low emissions technologies” that could include research and development funding for demonstration or flagship projects.

BHP’s investors, who had been part of negotiations with the company over its memberships of industry groups, welcomed the changes.

Working through a collective called Climate Action 100+, major investors have been negotiating for a year with BHP over its industry group memberships.

Thomas O’Malley, of HSBC Global Asset Management, said: “Climate lobbying matters to investors. As industry leaders like BHP make firm commitments on climate transition, we welcome this effort to ensure that trade associations remain in step with their more forward-thinking members.”

The Minerals Council of Australia – the peak industry group representing coalminers – said it too welcomed BHP’s announcement and would work with the miner and the council’s own state associations “to progress the key issues raised”.

In April 2019, the MCA chief executive, Tania Constable, said Australia’s climate change policy should use “all available means – including internationally recognised Kyoto credits” to reduce emissions.

Guardian Australia asked the MCA about its current position. A spokesperson said the use of Kyoto carryover credits was an issue for the government.

Activist investor group the Australasian Centre for Corporate Responsibility (ACCR) welcomed BHP’s reversal on the Kyoto credits.

Dan Gocher, ACCR’s director of climate and environment, said: “We welcome the fact that BHP has finally withdrawn its support for this absurd accounting trick.

“Now that Australia’s two largest miners, BHP and Rio Tinto, no longer support Kyoto carryover credits, the Business Council of Australia and the Minerals Council of Australia must withdraw their support too.”

ACCR is trying to pressure BHP through a shareholder resolution to push back on industry groups that have been advocating for a Covid-19 economic recovery that supported further fossil fuel development.

The Australian Council of Superannuation Investors chief executive, Louise Davidson, said BHP’s move “will provide greater transparency on climate lobbying activities of industry associations. We would like to see industry peers and other companies follow this approach.”

She added: “The new policy provides stronger and more detailed expectations on climate advocacy, including the need for associations to support the Paris agreement and BHP’s clear opposition to policies that rely on the use of Kyoto carryover credits. Rigorously applied, this initiative will have a major impact on the work of industry associations on climate change.”

Guardian Australia has approached the Business Council of Australia for comment.