Today, we release our second Climate Action Transition Plan (the 2024-2026 CATP). We continue to evolve our approach first published in 2020, introduce a new interim industrial emissions reduction target and lay out our plans for the next three years considering the risks and opportunities of our current combined energy and metals businesses.
Gary Nagle, Chief Executive Officer, said:
“Our 2024-2026 CATP reflects a wide range of inputs, including analysis of the evolving market landscape, new regulatory requirements, mining and energy peer approaches, the IEA’s latest modelling, stakeholder inputs, and emerging insights from the most recent UNFCCC dialogue. We have also undertaken extensive engagement with our shareholders and appreciate their time and support as we have developed this CATP.
“Reflecting on these various inputs, this CATP retains our existing emissions reduction targets, of 15% and 50% by the end of 2026 and 2035 respectively and our 2050 ambition of achieving net zero industrial CO2e emissions, subject to a supportive policy environment. It also introduces a new interim target of a 25% reduction in CO2e emissions for our industrial assets by the end of 2030. We are on track to meet our 2026, 2030 and 2035 emissions reduction targets, all of which are measured against a restated 2019 baseline.
“Looking ahead, our plan focuses on the delivery of our commitments, including implementing our MACC initiatives (where practicable and economically viable) and responsibly phasing down our thermal coal operations, while also allocating capital to grow our transition-enabling commodities business, and evolving our understanding and assessment of the climate-related risks and opportunities that our business faces.”
Our progress
We have maintained our previous industrial emissions reduction targets and ambition. Our transition plan reaffirms our existing targets against a restated 2019 baseline and adds a new interim target, leading towards a 2050 net zero emissions ambition, subject to a supportive policy environment:
2026: 15% reduction in our Scope 1, 2 and 3 industrial CO2e emissions against a restated 2019 baseline by the end of 2026
2030: 25% reduction in our Scope 1, 2 and 3 industrial CO2e emissions against a restated 2019 baseline by the end of 2030
2035: 50% reduction in our Scope 1, 2 and 3 industrial CO2e emissions against a restated 2019 baseline by the end of 2035
Glencore’s role in the climate transition
Glencore plays an important role in supporting the global transition to a low carbon economy. Across our business, we produce, distribute and recycle commodities that are key components of current transition technologies while supporting the energy needs of today.
The pace and pathway of decarbonisation are heavily influenced by many factors, from geopolitics to technological innovation. Our 2024-2026 CATP must therefore be resilient and flexible to cope with external economic and political factors, whilst sustaining our own climate targets and ambition. These external factors also highlight the need for global coordination and progressive and well-designed policies that are consistent with a just and orderly transition.
That is why continuous dialogue and engagement with stakeholders is an important part of how we develop our plans. The 2024-2026 CATP reflects a wide range of inputs, from stakeholder engagement to the IEA’s latest modelling to analysing peer approaches.
Our strategic pillars
The 2024-2026 CATP is comprised of four strategic pillars:
1. Managing our operational footprint: We continue to identify and deliver cost-effective emissions reduction opportunities for our Scope 1 and 2 emissions. Whilst our Scope 1 and 2 industrial emissions reflect a small proportion of our overall emissions footprint, these factors are within our control and we are developing solutions to address them, such as electrification and alternative fuel, as well as strengthening our own monitoring capabilities.
2. Responsibly reducing our Scope 3 industrial emissions: We remain committed to the responsible phase-down of our coal portfolio. We recognise the different roles of thermal coal and steelmaking coal – and the different transition pathways for both.
We reaffirm our approach to responsibly reduce our production of thermal coal in an orderly and just way. As part of this, we are not progressing any greenfield thermal coal investments. We expect a continued phase down of our thermal coal plants, reflecting our emissions reduction targets and in line with our Just Transition Principles. We will strive to mitigate impacts and accelerate the social benefit potential of any operational decisions on our local communities.
3. Advancing tomorrow through our transition-enabling commodities portfolio: The expected growth in clean energy and low-carbon technologies is leading to an increased need for ‘transition’ commodities and we are investing to meet an expected significant increase in demand for these.
4. Driving new business models: We are positioning our business for the future through the pursuit of new business models that support the transition, such as recycling and carbon solutions.
Elk Valley Resources
We have agreed with Teck Resources Ltd to acquire a 77% interest in its steelmaking coal business, Elk Valley Resources (EVR), which remains subject to mandatory regulatory approvals and is expected to close by no later than Q3 2024.
Steelmaking coal is an important transition-enabling commodity as it is an essential input into much of the world’s steelmaking in its current form. Steel is necessary for constructing transportation and infrastructure such as ocean-going vessels, rail, bridges and buildings, as well as energy transition infrastructure including wind turbines.
As there was no certainty that any transaction would be agreed when we commenced work on this strategy, and because we do not yet have access to the necessary information relating to EVR, we have developed this strategy considering the risks and opportunities of our current portfolio of our integrated energy and metals business.
Our commitment to future reporting
We intend to submit our 2024-2026 CATP for an advisory vote at our 2024 AGM. We will continue to review our CATP every three years, or if there are material changes to our business, and seek advisory votes when our climate plans are renewed.
