(Bloomberg Opinion) — As oil companies flesh out plans to cut carbon emissions, their peers in the mining sector risk being left behind.
BHP Group, Rio Tinto Group and Vale SA are already among the world’s largest emitters, thanks to the vast amounts of carbon spewed out turning their key product of iron ore into steel. Among producers with listings on major developed exchanges, only Royal Dutch Shell Plc sits higher than the big three miners in terms of so-called Scope 3 emissions.
(This describes pollution generated when a company’s products are used, such as when gasoline is burned in a car or steel is produced in a mill. It comprises the vast majority of total emissions in the resources sector.(1))
Oil companies are already working to address that issue. Eni SpA, Shell, Total SE and Repsol SA all have plans to reduce the emissions intensity of their products by about a third by the 2030s, with sharper cuts to 2050. BP Plc has signed up to a more ambitious target, reducing oil production 40% by 2030.
The big iron miners, on the other hand, have made do with only the vaguest of promises. Fortescue Metals Group Ltd. refuses to even disclose its easily calculated Scope 3 total.
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