Glencore has decided to limit its coal production to current levels “to meet the growing needs of a lower carbon economy”.
The company will instead turn its focus to growing production across its other commodities such as copper, nickel, cobalt, zinc and vanadium, all of which are used in the production of renewable batteries.
In a statement released on Wednesday, the company referred to these commodities as being “essential to the energy and mobility transition”.
Glencore aims to meet certain targets set out by both the United Nations’ sustainable development goals and the Paris Agreement, particularly the latter’s stipulation that the global average temperature not exceed pre-industrial levels by more than two degrees Celsius.
This push is not new for the company, which in 2017 established an initiative to reduce its carbon emissions by 5 per cent by 2020. Glencore introduced reporting on scope one, scope two and scope three greenhouse gas emissions as defined by the Greehouse Gas Protocol corporate standard.
Scope one emissions refer to direct emissions caused by the company’s assets, while scope two emissions are emissions from purchased energy. Scope three emissions are indirect emissions from sources not owned or controlled by a company. The most common example of this is the fuel used through the transport of materials by third-party companies.
Glencore will report publicly from 2020 on how its business activities are in alignment with the goals of the Paris Agreement.
It will also report on its longer-term efforts to reduce its scope three greenhouse gas emissions, these being indirect emissions from sources not owned or controlled by a company. The most common example of this is the fuel used through the transport of materials by third-party companies.
“Glencore recognises the importance of disclosing to investors how the company ensures that material capital expenditure and investments are aligned with the Paris Goals,” the company stated.
“This includes each material investment in the exploration, acquisition or development of fossil fuel (including thermal and coking coal) production, resources and reserves, as well as in resources, reserves and technologies associated with the transition to a low carbon economy.”
Glencore Australia produced around 88 million tonnes of saleable and coking coal in 2017 and the company has set a 2019 guidance of 145 million tonnes of production globally. The company underwent significant Australian expansion by acquiring a 49 per cent interest in Rio Tinto’s Hunter Valley operations in New South Wales in 2017, followed by the purchase of Rio Tinto’s Queensland coal assets the following year.