Global climate change is demanding rapid actions from all the global industries and at an individual level, and Australia is putting in much-needed efforts to address the climate issues, which are currently hampering the ecology of the continent.
The government has issued some guidelines and is adopting stringent measures to keep the greenhouse gas emissions under check, and the country is further promoting renewable energy to attain the net-zero carbon emission.
To Know More, Do Read: Australian Government Policies and Programs To Attain A Net-Zero Carbon Emission
While the government is working to achieve specific targets, which you would find in our above-linked writing, several industries such as mining, exploration, aviation, are adopting measures to curb the carbon footprints.
To Know More, Do Read: Australia Aviation Industry to Attain Carbon Neutrality by 2020? Qantas Improves Fuel Efficiency, and we would like to encourage you to visit the links provided in the above-linked article for better understanding on how major industries are planning to attain carbon neutrality to prevent the incidence like the massive bushfire and many other adverse impacts of the climate change.
Now that you are well acquainted with the stance of giant resource players in Australian such as BHP Group Limited (ASX: BHP), Origin Energy Limited (ASX: ORG), Rio Tinto Limited (ASX: RIO), Quants Airways Limited (ASX: QAN), let us now focus on the bullion sector, which is currently making the headlines of almost every media house amid its recent bull rally and deep consolidation.
The global Scope 1 and Scope 2 emissions from gold industry totalled 29,128 tonnes (CO2 Eq) in 2017 and 32,689 tonnes (CO2 Eq) in 2018 per tonne of gold production, as estimated by the World Gold Council in its recent studies.
Scope 1 and Scope 2 Emissions (Source: World Gold Council)
As per the estimates of the world gold council, the Scope 1 greenhouse gas emissions from gold refining and recycling industry stands at 0.84 tonnes (CO2 Eq) with Scope 2 emissions of 1.09 tonnes (CO2 Eq) per tonne of gold.
The Scope 3 emissions of the refining and recycling stand at 1.69 tonnes (CO2 Eq) per tonne of gold, and the accumulative (CO2 Eq) emissions for 2018 stands at 1,1168 tonnes (CO2 Eq), which leads to the total emissions of 4,228 tonnes (CO2 Eq) per annum from the gold downstream processing.
Annual global gold market GHG emissions (Source: World Gold Council)
Such high emissions per tonne of production make the gold industry a significant contributor in the overall global emissions, which in turn, requires the attention of major operating firms in the industry to take visible actions, that could be achieved by adhering to the guidelines provided by various organisations.
Carbon Neutrality Transition Pathways
In 2015, various nations reached a landmark agreement to keep the increase in global temperature to well below 1.5°C, which suggested that to keep the target the net global greenhouse gas (GHG) emissions must reach zero by 2050.
To achieve the net global greenhouse gas (GHG) emissions target, the World Gold Council estimates, that it would take rapid reductions in emissions of more than 5 per cent per year, globally, which is calling for actions from the country level to the individual level.
In order to join hands with other industries, the gold sector needs a framework to achieve some specific targets. The Oxford Martin Principles for Climate-Conscious Investment provides one such framework for the gold sector, through which companies could orientate the climate-conscious actions.
The key principles of the framework are as below:
- Commitment to net-zero emissions
The firms operating in any sector should commit to a date or a temperature increase prior to which the net emissions (CO2 Eq) associated with their respective activities could reach a net-zero.
- Profitable net-zero business model
The businesses across the globe must plan to ensure profitability once the net emissions (CO2 Eq) reaches net-zero.
- Quantitative medium-term target
The global firms should set upon a medium-term target prior to reaching the net-zero emissions (CO2 Eq).
Science-Based Target Initiative (SBTi)
While the above-mentioned key principles are helpful, the companies across the globe require some measurable quantity to set the emission targets and reckon the improvement in the carbon footprints at an individual level.
The SBTi is a collaborative initiative taken by CDP, the U.N. Global Compact (or UNGC), the World Resources Institute (or WRI) and World Wildlife Fund (or WWF). The aim of the initiative is to inch up the corporate ambition on climate action by prompting companies across the globe to set greenhouse emissions reduction target in line with level of decarbonisation suggested by science.
The initiative also represents a robust approach for companies across the globe to manage their emissions over the long term, and it also represents an approach to align the individual emissions reduction targets with the commitments of the Paris Agreement.
Carbon Neutrality Across the Gold Supply Chain by 2050
Gold mining captures the significant tranche of the global gold-related carbon emissions; however, the gold industry could find it easy to decarbonise as compared to the other major sectors such as agriculture, aviation, steel and as per the World Gold Council, there are many practical available options.
The emission intensity in the gold industry vary as per the geographical location amid different ore type and grade, and specific processes used across varies locations in the gold mining industry.
Despite the fact, the overall majority of greenhouse gas emissions in the gold industry come from purchased electricity, which makes up about 40 to 45 per cent of the overall greenhouse gas emissions. As per the estimation of the world gold council, the fuel combustion used in powering vehicles and machines or to generate electricity on-site accounts for approx. 30 to 35 per cent of the greenhouse gas emissions, while upstream scope 3 emissions related to the production and transportation of fossil fuels accounts for nearly 20 per cent of the overall greenhouse gas emissions in the gold industry.
How Could It be Reduced?
The global gold mining companies are currently focusing on the process improvement and energy efficiency front. The current practices (as suggested by WGC), which could be adopted by the companies are as below:
- Use of advanced asset management strategies, which combines real-time operational data with predictive analytics, to reduce energy consumption.
- Use of unmanned drones to survey sites and operations to reduce transportation overheads.
- Upgrading to energy-efficient technologies such as LED lighting and variable-frequency drives.
- Advanced processes such as mechanical rock excavation, advanced fragmentation, bulk sorting, in-pit crushing and conveying, coarse particle recovery, and even biomining.
The second way to witness improvement across the emission profile is to decarbonise electricity, by shifting towards renewable energy sources. As per the World Gold Council (or WGA), renewable sources of electricity generation already have lower lifetime cost than new-build conventional electricity generation in most parts of the world.
At the same time, the gold industry could promote the energy storage technologies, which, as per the WGA, have seen huge growth in investment and deployment, and corresponding reductions in costs. The WGA further anticipates that lithium-ion battery prices fell by 21 per cent per year between 2010 and 2018 and are forecast to continue falling a further 64 per cent by 2030.
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