Glencore says emissions from using its products to fall 30% by 2035

LONDON (Reuters) – Glencore (GLEN.L) said on Tuesday it expected carbon emissions from the use of its products to fall by around 30% by 2035, largely due to falling coal output, becoming the first of the major mining companies to make such a projection.

Mining and oil companies are under pressure from investors, activists and bankers to cut their emissions of climate warming gases by reducing production of fossil fuels.

Emissions are divided into categories: Scope 1 covers an organisation’s direct emissions; Scope 2 covers indirect emissions from the power it buys to run operations; and Scope 3 relates to emissions generated when its products are used.

Glencore, which operates mines and trades commodities, said Scope 3 emissions would fall through the “natural depletion” of its oil and coal resources but that it was not yet ready to set targets for their active reduction.

“We expect the depletion of our coal resource base in Colombia, and to a lesser extent South Africa and Australia to contribute,” the miner said in a statement.

A year ago, Glencore said it would cap coal output at 150 million tonnes per annum. Coal, which is highly cash generative and low cost, accounted for about a third of Glencore’s core profit in 2018.

In July, rival BHP (BHP.AX) said it would invest $400 million over five years to reduce emissions but has not yet set Scope 3 goals. Neither have peers such as Anglo American (AAL.L) and Rio Tinto (RIO.L) (RIO.AX).

Glencore’s exposure to coal is partly to blame for the company’s shares lagging its peers.

The firm added it was on track to cut its Scope 1 and 2 emissions intensity by around 10% by the end of 2020 compared with 2016 levels, exceeding its initial target of 5% for that period.

Source – Reuters