Anglo-American has acknowledged a substantial breach in greenhouse gas (GHG) emissions at its Capcoal mine complex in Queensland, which could result in a cost of US$10 million in carbon offsets.
The breach has been estimated to exceed 841,000 metric tons (kT) of emissions, as revealed by the Australian Conservation Foundation (ACF) through freedom of information laws. The ACF claims that this breach is the latest in a series of others at the mine complex, which supplies metallurgical coal for steelmaking.
The breach occurred following the introduction of the safeguard mechanism policy in 2016, which requires Australia's largest GHG emitters to keep their net emissions below a set baseline. The ACF alleges that Anglo-American consistently relied on policy loopholes and argues that if the company had been required to pay for exceeding its emissions limit, it would have faced a carbon credit bill of A$50 million.
To address the excess emissions, Anglo-American has committed to purchasing carbon credits covering the 841,137 metric tons of emissions and has stated that its emissions are now back on track. However, the company has increased its annual emissions baseline twice and was granted permission to shift from a single year to a three-year and then four-year baseline, allowing for a release of 54% more GHG emissions than previously allowed.
Research firm RepuTex has calculated that emissions covered by the safeguard mechanism have increased by 7% since 2016, while industrial emissions have risen by 17% since 2005. Previous estimates had anticipated that the scheme would result in a reduction of 200 million metric tons of emissions from 2020 to 2030. There are now calls to close loopholes and lower the baselines to ensure greater accountability and emissions reduction.
