We launch The Forward with a company that sits at the centre of Australia's climate reporting challenge — and whose sustainability report raises questions every mining, energy and construction executive should be thinking about.
BHP Group produces the iron ore, metallurgical coal, and copper that the world's infrastructure is built from. Its Scope 3 emissions — released when customers turn BHP's products into steel, energy, and manufactured goods — are roughly 40 times larger than its Scope 1 and 2 combined. That arithmetic defines BHP's climate challenge, and its Climate Transition Action Plan.
BHP Group — Annual Report 2025 & Climate Transition Action Plan 2024
Published September 2024 · 96 pages · Subject to shareholder advisory vote · Aligned with Paris Agreement 1.5°C pathway for operated assets; 2°C for value chain (Scope 3).
Three passages worth your attention
Annotated with plain-English context and our take on what it means for you
"Our Scope 3 Category 11 emissions — those arising from the processing and use of our products by customers — represent approximately 96% of our total value chain emissions. For steelmaking coal alone, the combustion of our product by customers generates emissions we estimate at around 380 million tonnes of CO₂-equivalent annually."
— BHP Climate Transition Action Plan 2024, p. 22This single statistic reframes the entire BHP climate conversation. 380 million tonnes from steelmaking coal customers alone is equivalent to around 85% of Australia's total annual national emissions (~446Mt CO₂-e as of 2024). BHP doesn't burn this coal — its customers do. But under Scope 3 accounting, it sits on BHP's ledger.
This is the central tension in mining company climate reporting: BHP can achieve net zero in its own operations while its products continue generating emissions at a national scale. The question is whether that constitutes climate leadership or climate accounting.
"BHP has set a goal to maintain steelmaking coal production broadly flat through to at least 2030, while investing in partnerships to accelerate green steel technology development. We do not believe rapid divestment of steelmaking coal assets is consistent with a responsible energy transition."
— BHP Climate Transition Action Plan 2024, p. 38This is BHP's most contested position. The argument is logical: if BHP sells its coal mines, someone else buys them — likely with less capital, weaker environmental standards, and less incentive to invest in green steel R&D. The emissions don't disappear; they just move off BHP's books.
Critics counter that maintaining production "broadly flat" still locks in decades of Scope 3 emissions, and that green steel partnerships — while genuine — are unlikely to achieve commercial scale before 2035. Both arguments have merit. What has shifted in FY2025 is the pace of BHP's own bets: the NeoSmelt consortium (electric smelting furnace for ironmaking) and a CCUS Hub Study with major Asian steelmakers were both announced in 2025, signalling BHP is accelerating its green steel investment beyond R&D into pre-feasibility. It's not enough to resolve the Scope 3 tension — but it narrows the gap between rhetoric and action.
"The Australian Government's reformed Safeguard Mechanism requires BHP's Australian operations to reduce Scope 1 emissions intensity by approximately 4.9% per year through to 2030. BHP's Australian Scope 1 emissions declined 8% in FY2024, ahead of this trajectory, primarily through electrification of mining equipment and methane capture at our Queensland coal operations."
— BHP Annual Report 2025, Operating and Financial Review 9.8 – Climate changeTwo consecutive years of outperformance against the Safeguard Mechanism trajectory — 8% in FY2024, 5% in FY2025 — is a signal worth reading carefully. BHP's reductions are being driven by electrification of mining equipment and methane capture at Queensland coal operations: both capital-intensive interventions that required investment decisions made years earlier.
For smaller mining operators who haven't yet engaged seriously with Safeguard Mechanism compliance, this is the key lesson: the 4.9% annual intensity reduction is achievable, but it requires capital decisions made now, not in 2028. The window to get ahead of the trajectory — rather than scrambling to catch up — is closing.
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This month at CFS — Social Risk AssessmentBHP's Scope 3 challenge is also a social licence challenge — communities and investors are asking harder questions about the value chain. If your organisation needs help identifying, quantifying, and managing ESG risks that affect project approvals, financing, and long-term viability, get in touch by emailing Bronwyn directly. |
Should mining companies be held responsible for the emissions released when customers use their products?
- Yes - if you extract it and sell it, you're part of the problem
- Partially - miners should invest in clean alternatives but can't control customer choices
- No - responsibility lies with the companies and consumers burning fossil fuels
- The question is wrong — the real issue is the pace of the energy transition