Bowen demands BHP cut onsite emissions as leaked documents reveal fleet electrification delays

Australia’s climate change minister, Chris Bowen, has issued a direct directive to BHP and other major industrial polluters to reduce onsite emissions, following leaked internal documents revealing delays to renewable energy projects and the electrification of diesel fleets. The revelations have intensified scrutiny on the effectiveness of the safeguard mechanism and the diesel fuel tax credit scheme, which provides BHP with over $600 million annually. While Resources Minister Madeleine King maintains that BHP is complying with current regulations, Independent MP Kate Chaney has criticised the policy framework as weak.

Leaked documents indicate BHP scrapped a project to significantly reduce global emissions and war-gamed options to push the electrification of its polluting fleets into the next two decades. Internal memos from 2023 stated that urgent decarbonisation was essential for the Western Australian iron ore division’s licence to operate. Bowen emphasised that while the safeguard mechanism allows flexibility, he expects direct emission cuts from all large emitters.

The Australian safeguard mechanism requires roughly 200 major industrial facilities emitting more than 100,000 tonnes of carbon dioxide annually to cut their greenhouse gas emissions intensity by up to 4.9 per cent each year. Companies can meet these obligations through direct onsite reductions or by purchasing carbon offsets, including Australian carbon credit units or safeguard credits generated by underperforming facilities. The scheme was revamped in 2023 to set new baselines and introduce an absolute cap on total emissions, though the pace of reduction is determined by the climate minister.

Independent MP Kate Chaney described the current policy as weak, arguing that the government is effectively “playing within the rules” set by industry. She called for reforms to the diesel fuel tax credit scheme, noting that BHP receives over $600 million annually under the rebate. Chaney argued that the incentive to keep burning diesel was greater than that to cut emissions by shifting to renewable energy and electric trucks, describing the situation as having the government’s foot on the brake and accelerator simultaneously.

BHP defended its record, citing a 36 per cent reduction in emissions from 2020 levels and stating it has transitioned 70 per cent of its energy use to renewables. The company attributed the slowdown in operational decarbonisation to the lack of availability of scalable battery-electric truck technology, a claim contested by competitor Fortescue, which claims the technology is ready and has ordered hundreds of such trucks. Resources Minister Madeleine King expressed no concern, noting BHP is complying with the scheme and making its own commercial decisions.