Australian government granted BHP repeated approval to increase carbon emissions

Mining giant BHP has repeatedly applied and been granted approval to increase its emissions under an Australian government policy that promised to limit carbon pollution from big industry.

Government data shows BHP exceeded its initial emissions limits, set under the scheme known as the “safeguard mechanism”, at eight of its 14 large Australian industrial sites since 2016-17.

The increases continued as BHP’s outgoing chief executive, Andrew Mackenzie, last year called for drastic action to combat the climate crisis, and committed the company to keeping its emissions at or below 2017 levels by 2022 and reaching net-zero emissions in the latter half of the century.

A 60% rise in industrial emissions points to failure of Coalition’s ‘safeguard mechanism’

Across its Australian major facilities, BHP has been allowed a 13% increase in emissions limit in three years. If it emitted up to its new limit at each site it would increase national emissions by 425,689 tonnes a year.

The company was also required to buy and submit more than 81,000 carbon credits for exceeding its new, increased pollution limits as two sites.

The increase in BHP’s emissions limits, known as baselines, was calculated by the Australian Conservation Foundation and confirmed by the Clean Energy Regulator, which administers the scheme.

The big miner is not alone. An analysis by the Australian Conservation Foundation found the government had approved increases in industrial emissions over the past two years that could allow more than 7m tonnes of additional pollution each year, about 1.3% of annual national carbon pollution.

The safeguard mechanism initially promised to limit emissions increases from big polluters to ensure they did not unreasonably cancel out cuts paid for by taxpayers through the Coalition’s main climate policy, the emissions reduction fund.

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Suzanne Harter, climate change campaigner with the Australian Conservation Foundation, said the BHP data again showed that the Morrison government’s policy allowed big polluters to just emit more if they exceeded designated limits.

“The government’s safeguard mechanism is not safeguarding the climate we all share,” she said. “Companies can make grand statements, but right now Australia has no meaningful policy to make sure companies cut emissions to protect our future.”

The government has adjusted how it describes the role played by the safeguard mechanism. In 2016, the then environment minister, Greg Hunt, said it would ensure emissions cuts contracted through the emissions reduction fund were not offset by significant increases above business-as-usual levels elsewhere in the economy.

In response to questions on Sunday, the emissions reduction minister, Angus Taylor, said it was designed to support growth while encouraging businesses to lower their emissions intensity.

BHP’s increases come as the company faces pressure from activist investors to back up its climate pledges with concrete action. Almost 30% of shareholders last year backed a resolution that would have forced the company to quit industry bodies that hold positions at odds with its stance on global warming.

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A BHP spokeswoman told Guardian Australia the company was complying with government policy and regulations under the safeguard mechanism, and was committed to reducing its operational emissions globally.

She said its total operational emissions were 3% lower in 2019 than in 2017 and it had a longer-term goal of achieving net-zero operational emissions “in the latter half of this century, consistent with the Paris agreement”.

The safeguard mechanism started operating in 2016, imposing emissions limits on facilities that emit more than 100,000 tonnes. Emissions limits were initially based on either a facility’s historic emissions or an independent forecast of future emissions.

Companies that exceeded their baseline were expected to buy carbon credits to offset the additional emissions, or pay a penalty, but in practice this has applied in only some cases.

Many facilities have applied for, and been granted, an increased limit. The Clean Energy Regulator said companies could have limits changed if it was found they were a poor indicator of future emissions, they had new or significantly expanded facilities or emissions had increased as a result of natural variability.

Under changes being introduced this year, all facilities will be moved to limits based not on their total emissions, but on emissions intensity – how much they expect to emit per unit of production.

Big polluters again allowed to lift emissions without penalty

It means if companies lift production they will be able to increase carbon pollution without penalty. In theory, these limits per unit of production could be reduced over time to cut emissions and encourage a shift to clean practice, a change Labor proposed without detail before the 2019 election.

The Morrison government is divided on climate action and the future of coal-fired power. It has commissioned a review of its climate policies led by the businessman Grant King, and has promised it will this year release a technology investment roadmap, an electric vehicle policy and a long-term emissions strategy.

It has also made it known to the owners of the Vales Point coal-fired power plant that they are likely to get an $11m grant to upgrade the facility, and is spending $4m on a feasibility study into a new coal generator in north Queensland.

The Coalition has a 2020 climate target of a 5% cut in emissions below 2000 levels under Kyoto, but government data suggests emissions will be just 0.3% below what they were at the turn of the century.

In an emailed response on Sunday, Taylor acknowledged emissions related to exports had grown in recent years, but said economy-wide emissions were 12.9% below 2005 levels. “That is the metric that counts towards our international targets, and Australia’s efforts in reducing global emissions,” he said.

Official projections suggest the country will fall short of its 2030 target of a 26-28% cut below 2005 levels under current policies unless it uses carryover credits, a controversial accounting measure. Analysts have suggested Australia should be cutting pollution by at least 45% by 2030, en route to net zero emissions by 2050, to be playing its part in meeting the goals of the Paris deal.

The former prime minister Kevin Rudd last week said the signing of the Paris agreement in 2015 should have triggered the adoption of a 25% emissions reduction target by 2020 but that instead the Coalition government opted to keep “one of the lowest bars in the world” of 5%.

“Yet despite the low bar, the current government is still struggling to meet even that,” Rudd said.

The government is facing calls from business leaders and the energy industry to consider a climate action bill by the independent MP Zali Steggall that includes a proposal for a target of net zero emissions by 2050, an emissions budget, and assessments every five years of national climate change risk.

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