BHP Investor Briefing Says Fuel Tax Break Slows Australian Decarbonisation

A briefing document circulated to BHP investors warned that the federal government’s fuel tax break is acting as a handbrake on the decarbonisation of the miner’s Australian operations, The Guardian reported. The document, prepared by the Australian Centre for Corporate Responsibility, cited earlier reporting by Guardian Australia and the ABC’s Four Corners that showed BHP had halted or delayed key emissions reductions projects.

Those projects included shelved renewables developments in Western Australia, postponed electrification of the Pilbara diesel truck fleet, and the cancellation of a processing plant that would have cut emissions for steel-making customers.

The briefing urged investors to press BHP on setting a medium-term emissions target. ” The analysis found that removing the tax credit would shift four major projects from neutral to positive returns on investment. BHP is the largest recipient of the credit, which offset $622 million in diesel costs for the company in the last financial year.

ACCR head of engagement Naomi Hogan said removal of the credit would make most fleet electrification projects financially viable. She added that the rebate was delaying decarbonisation across the mining sector. Independent senator David Pocock noted that BHP paid $8 million under the safeguard mechanism last year while receiving $379 million in fuel tax credits.

Labor MP Jerome Laxale has also called for limits on the credits. The ACCR analysis estimated that BHP’s initial decarbonisation plan would require US$11.2 billion to US$19.3 billion in carbon credit purchases by 2050. A ten-year delay would raise that range to US$16.6 billion to US$28.5 billion.