《力拓集团(Rio Tinto Group) :2022年气候变化应对措施报告(英文版)(46页).pdf》由会员分享,可在线阅读,更多相关《力拓集团(Rio Tinto Group) :2022年气候变化应对措施报告(英文版)(46页).pdf(46页珍藏版)》请在三个皮匠报告上搜索。
1、Climate Change Report 2022ContentsChief Executives statement2Our business at a glance 4Climate Action Plan-2022 progress and 2023 update6Our strategy and approach to climate change8Producing materials essential for the low-carbon transition10Reducing the carbon footprint of our operations14Partnerin
2、g to reduce the carbon footprint of our value chains22Enhancing our resilience to physical climate risk28Climate policy engagement32Climate governance33Just transition34Climate disclosure35Emissions and energy data37Assurance statement by KPMG40Cover|Employee at IOC tailings in Labrador City,NL Cana
3、daOur operations are located on land and waters that have belonged to Indigenous peoples for thousands of years.We respect their ongoing deep connection to Country and recognise their vast knowledge of the land,water and environment.We pay respects to Elders,both past and present,and acknowledge the
4、 important role Indigenous peoples play within our business and our communities.Visit to find out more2022 highlightsHigh-grade iron ore Simandou:Signed a non-binding term sheet with our partners to progress the co-development of infrastructure.Theproject will deliver high-grade ironore,suitable for
5、 the DRI-EAF2 steelmaking process.Green steel Blast furnace optimisation:Extended our collaboration with over 20 customers,such as Baowu,POSCO,Nippon Steel Corporation and Shougang,with potential carbon emissions reductions of up to30%.BioIronTM:Successfully piloted an innovative,low-carbon iron-mak
6、ing process on Pilbara iron ore.Hydrogen-based DRI1:Collaborated with BlueScope and Salzgitter Flachstahl to test direct reduction of our products using green hydrogen and develop cleaner processing options.Iron Ore Pilbara:Planned investment of$600 million in 230MW of solar power facilities and 200
7、MWh of storage.This is in addition to the 34MW solar facility installed at Gudai-Darri.Pilbara:Developed partnerships with Scania,Caterpillar,Volvo and Komatsu to deploy more efficient autonomous haulage solutions and battery-powered trucks.Marine biofuels:Joined a trial with BP.Arvida:Invested in a
8、 new aluminium recycling facility and plans to replace our closing smelter with an expansion of the AP60 smelter to produce low-carbon aluminium.Alma:Committed$188 million to expand production of higher-value low-carbon billets.Laterrire Plant:Commissioned a new aluminium remelt furnace.ELYSISTM:Con
9、ducted commercial testing of direct emissions-free smelting technology with 450kA cells under construction.Low-carbon material:Partnered with organisations including Volvo,Ford and AB InBev(Corona Canada).Aluminium Queensland smelter repowering:Commenced evaluation of proposals to repower our alumin
10、ium assets with up to 4GW of wind and solar,backed up by energy firming and storagesolutions.Queensland Alumina:Progressed to a pre-feasibility study for a double digestion project to reduce emissions and operational expenditure.Oyu Tolgoi:Acquired full ownership of Turquoise Hill Resources Ltd(TRQ)
11、for$3.1 billion,increasing our direct project ownership to 66%.Rincon:Acquired Rincon for$825 million and approved funding of$194 million for early works to develop an accelerated starter plant with plannedexpansion.NutonTM:Joined strategic partnerships to test leaching technology on legacy copper w
12、aste and sulphide orebodies.Critical minerals from waste:Began extracting tellurium concentrate at Kennecott.Achieved first production of scandium oxide and demonstration of an innovative spodumene(lithium)concentration process at our Critical Minerals and Technology Centre(RTITQuebec Operations).Co
13、pper and Minerals Rio Tinto Iron and Titanium(RTIT)Quebec Operations:Committed$537 million(C$737 million)in partnership with the Government of Canada to decarbonise RTIT Quebec Operations and boost critical mineralsprocessing.Richards Bay Minerals:Partnered with Voltalia for solar power(20-year powe
14、r purchase agreement).Renewable diesel:Launched a pilot at Boron,with trials also planned forKennecott.Grow in materials enabling the energy transition Develop products and technologies that help our customers decarbonise Accelerate the decarbonisation of our assets1.Direct Reduced Iron.2.Direct Red
15、uced Iron Electric Arc Furnace.1Climate Change Report 2022|Climate Change Report 2022Chief Executives statementOur purpose is to find better ways to provide the materials the world needs.Meeting the incremental demand of the energy transition,and ensuring local supplies of critical minerals globally
16、,deepens our relevance to the world and ensures our long-term profitability.We are creating real momentum,and seeing early results gives me conviction that we have the right objectives,the right team,and the rightstrategy.Our Scope 1 and 2 emissions targets of 15%reductions by 2025 and 50%by 2030 ar
17、e aligned with 1.5C the stretch goal of the Paris Agreement and are really challenging.In contrast to many of our peers,about 80%of our emissions are driven by processing and producing metals and minerals,which are high temperature,hard-to-abate activities.The remaining 20%are from our mining operat
18、ions.The low-carbon transition is complex:developing new technologies and implementing major projects to decarbonise our business will take time.We estimate that we will invest$7.5 billion in capital between 2022 and 2030 to deliver our decarbonisation strategy.So we need to be disciplined about our
19、 capital investment and make a commercial case for each mitigation project.Our experience shows that we cannot solve this simply by allocating capital.We also need to attract the right talent,deploy new technology at scale,secure approvals from regulators and partner respectfully with local communit
20、ies and Indigenous peoples.Inaddition,higher carbon prices and other government incentives are needed to drive the production and consumption of low-carbon metals and minerals.In 2022,our Scope 1 and 2 emissions were 30.3Mt CO2e(31.0Mt in 2021),a reduction of 7%below our 2018 baseline.This is primar
21、ily the result of switching to renewable power at Kennecott and Escondida in prior years,aswell as lower than planned production from the Kitimat and Boyne aluminium smelters in 2022.Wedid not advance the actual implementation of our abatement projects as fast as we would have liked last year,so our
22、 capital expenditure on decarbonisation projects was$94 million,lower than we anticipated when we set our targets.Challenges have included late delivery of equipment,resourcing constraints impacting study progress,construction and commissioning delays,and project readiness.6+1 abatement programmesIn
23、 response,we established six abatement programmes,with dedicated people,to focus on the decarbonisation challenges that cut across our product groups:repowering our Pacific Aluminium Operations,renewables,ELYSISTM,alumina process heat,minerals processing and diesel transition.We are building capabil
24、ity and gaining a deeper understanding of our decarbonisation challenge(both constraints and opportunities),and our related operational expenditure increased to approximately$140 million in 2022.As a result,we are better placed to deliver the complex and large-scale structural changes to our energy
25、system needed to achieve our 2030 target.Given the long lead times for some of these projects,we established one additional programme to increase our investments in nature-based solutions projects and now expect these to make a more significant contribution to our targets.Ifdone well,these projects
26、can play a substantial role in addressing carbon emissions and biodiversity loss,while also providing benefits to local communities.Our people working on these“6+1”abatement programmes,and our substantial investments in technology,will drive the innovation and transformation needed to accelerate our
27、 low carbon transition and ensure the long-term resilience of our business.Scope 3 partnershipsOur Scope 3 emissions were 584Mt CO2e in 2022 over 1%of the global total.These are primarily from our customers in Asia,processing our iron ore into steel and bauxite into aluminium,so our level of control
28、 is limited.The best way to tackle these emissions is to work in partnerships to develop the technologies needed to produce low-carbon metals and minerals.Lastyear we increased our engagement with our customers,governments,universities and others.It is encouraging that the initial testing phase of o
29、ur BioIronTM process showed great promise and demonstrated that using microwave energy and sustainable biomass as a reductant is well suited to Pilbara ores.Andweare continuing to scale up the ELYSISTM technology the worlds first carbon-free aluminium smelting process towards the demonstration of ev
30、en larger commercial-size cells.In the past year,I have spent time engaging with a diverse range of stakeholders on the need to work together and address climate change with urgency.Given the structural changes we must make to our energy system,2030 is just around the corner.Our success relies on ou
31、r ability to strengthen our resilience to the physical,societal and economic effects of climate change and the energy transition,while building partnerships and capabilities that enable us to secure newopportunities.Jakob StausholmChief ExecutiveOver a year ago,we put the low-carbon transition at th
32、e heart of our new strategy,setting a clear pathway to deliver long-term value as well as ambitious targets to decarbonise ourbusiness.Climate Change Report 2022|2“We will only invest in quality assets which will give robust returns under a range of economic,geopolitical and carbon scenarios,creatin
33、g a resilient portfolio with significant upside to the energy transition.We are applying similar thinking to our approach to decarbonisation.”3Climate Change Report 2022|Our business at a glanceConsolidated sales revenue bydestinationConsolidated sales revenue by productOur key assets are located in
34、 close proximity to our major markets:54.3%8.8%6.5%7.4%15.9%7.1%$55.6bn59.0%4.8%5.6%5.8%24.8%$55.6bnIron ore$32,801bnCopper$3,196bnGreater ChinaJapanAluminium2$13,790bnOther$3,098bnMinerals$2,669bnAsia1EuropeUSOtherIron ore3AluminiumCopperMinerals3Mines17436Smelters,refineries and processing plants4
35、01814Mt CO2 Scope 1 and 2 emissions3.1Mt21.1Mt1.5Mt4.0MtRioTinto share ofproductionIron ore272.9Mt(2021:266.8Mt)Bauxite54.6Mt(2021:54.3Mt)Aluminium3,009kt(2021:3,151kt)Mined copper521.1kt(2021:493.5kt)Titanium dioxide slag1,200kt(2021:1,014kt)Underlying EBITDA$18.6bn(2021:$27.6bn)$3.7bn(2021:$4.4bn)
36、$2.4bn(2021:$4.0bn)$2.4bn(2021:$2.6bn)1.Excluding Greater China and Japan.Greater China includes China and Taiwan.2.Aluminium includes bauxite and alumina.3.Our Iron Ore product group includes our 17 iron ore mines in the Pilbara and three salt operations(Dampier,Port Hedland and Lake MacLeod).Our M
37、inerals product group includes the Iron Ore Company of Canada(IOC).4.Covering processing plants engaged in the material transformation of input products with total Scope 1 and 2 emissions greater than 100,000 tonnes CO2.The integrated processing facilities at RTIT Quebec Operations are counted once.
38、Climate Change Report 2022|4Materials for low-carbon transitionGlobal dataRioTinto dataDemand by sectorConstruction&infrastructurePower/electricalAuto(transport)Machinery&equipmentConsumer durablesOther14%55%19%10%2%9%27%23%16%8%17%16%10%35%15%24%Finished steel 1,700MtAluminium 96MtCopper 31MtIron o
39、re/steelAluminiumCopperTotal emissions 1,020Mt CO2e 10.4 tCO2e/tTotal emissions 3,150Mt CO2e 1.7 tCO2e/tTotal emissions 109Mt CO2e 3.5 tCO2e/t29Mt 14Mt CO2e 0.5 tCO2e/t AlSecondary aluminium650Mt 325Mt CO2e 0.5 tCO2e/t steelScrap-based steel110.6Mt 5.3Mt CO2e 0.5 tCO2e/t CuSecondary copper 12,000MtT
40、otal material moved10,000Mt Total material moved 1,000MtTotal material moved134Mt2 7.5Mt 180Mt CO2e 1.3 tCO2e2/t Al2O35.6Mt CO2e 0.7 tCO2e/t Al2O3Alumina2t69Mt 3.0Mt 820Mt CO2e 12 tCO2e/t Al14.5Mt CO2e 4.8 tCO2e/t AlPrimary aluminium1,250Mt 2,750Mt CO2e 2.2 tCO2e/t steel Ore-based steel121Mt 0.2Mt 3
41、4Mt CO2e 1.6 tCO2e/t Cu0.2Mt CO2e 0.9 tCO2e/t CuPrimary refined copper1t1t365Mt 50%Al2O355Mt 49%Al2O34.7Mt CO2e 0.02 tCO2e/t ore0.9Mt CO2e 0.02 tCO2e/t oreBauxite4,300Mt 0.6%Cu120Mt 0.6%Cu70Mt CO2e 3.1 tCO2e/t Cu1.3Mt CO2e 2.3 tCO2e/t CuCopper ore32,450Mt 62%Fe283Mt 61%Fe70Mt CO2e 0.03 tCO2e/t ore3.
42、7Mt CO2e4 0.01 tCO2e/t oreIron oreProductEmissions ProductEmissions ProductEmissions 200t600t15t5t1t2t8t1.Ore-and scrap-based steel are notional categories based on RioTinto estimates of raw material inputs for different steel production pathways.2.Smelter grade Alumina only.3.Copper ore product bef
43、ore processing.4.RioTinto total iron ore emissions include equity-basis emissions from our Pilbara operations and from IOC.Sources:RioTinto analysis and estimates,CRU,Skarn Associates,Wood Mackenzie,International Aluminium Institute.5Climate Change Report 2022|Climate Change Report 2022Our Climate A
44、ction Plan 2022 progress and 2023 updateIn 2022,our shareholders supported our Climate Action Plan(CAP)in a non-binding advisory vote on the companys ambitions,emissions targets and actions to achieve them.We will continue to publish our progress on climate change annually in line with the recommend
45、ations of the Task Force on Climate-related Financial Disclosures(TCFD).The Board is fully aligned with this action plan and believes it will deliver value for our shareholders,our customers and wider society.The table below summarises progress in 2022 and our action plan in 2023.1.Scope 1 and 2 emi
46、ssions targets and roadmapWe have committed to reach net zero by 2050 and have set ambitious interim targets relative to our 2018 equity emissions baseline:to reduce greenhouse gas(GHG)emissions by 15%by 2025 and to reduce GHG emissions by 50%by 2030.1Progress in 2022 Repowering Pacific Aluminium op
47、erations:we issued arequest for proposal for more than 4GW of wind and solar projects to support repowering of the Boyne smelter.Tomago issued expression of interest seeking renewable projects to support repowering of the smelter(a non-managed joint venture).Renewables:we installed the first 34MW of
48、 solar capacity at Gudai-Darri and announced that we are planning to invest$600 million for solar,storage and transmission to deliver a further 230MW of solar power and 200MWh storage in the Pilbara from 2023-2026.We started construction for the first phase of our 30MW project at Kennecott and comme
49、nced direct market engagement for our US footprint(Boron,Resolution,Kennecott)for around 1GW of renewables.We issued expression of interest for an islanded 35MW microgrid at Amrun and signed a Solar PV 130MW power purchase agreement(PPA)for Richards Bay Minerals(RBM)with Voltalia.Construction of a 2
50、0MW hybrid project continued at QIT Madagascar Minerals.ELYSISTM:production from our pilot cell continued,as did construction of larger commercial scale cells at Alma.Alumina process heat:we developed our approach to decarbonising our refineries.Order of magnitude studies for electric steam generati
51、on and electrical infrastructure requirements are in progress.A feasibility study has been completed for the hydrogen calcination project.An order of magnitude study for double digestion has been completed with approval to proceed with the pre-feasibility study.Minerals processing:$537 million(C$737
52、)partnership with the Government of Canada to decarbonise RTIT Quebec Operations and boost critical minerals processing.Diesel transition:we have progressed biofuel trials at Boron and Kennecott.We began trialling an underground battery electric loader and haul truck at Kennecott.Wedelivered our fir
53、st road-sized haul truck into the Pilbara fortesting.Nature-based solutions(NbS):we completed pre-feasibility studies for NbS projects at five high-potential landscapes.Actions in 2023 Repowering Pacific Aluminium Operations:progress renewable supply options for the Boyne and Tomago aluminium smelte
54、rs.Renewables:approve and commence construction of 100MW solar PV for the Pilbara.Progress studies on the next 130MW solar PV for the Pilbara.Sign PPA for Amrun microgrid and start construction in 2023/24.Sign a Wind PPA at RBM.Sign commercial agreements for our US operations(Kennecott,Resolution an
55、d Boron).ELYSISTM:commission 450kA ELYSISTM cells currently under construction at Alma.Alumina process heat:develop the decarbonisation energy transition strategy for the Yarwun and Queensland Alumina(QAL)refineries.Complete feasibility studies for electric steam generation and thermal storage optio
56、ns at QAL and Yarwun,and seek approval for electric boilers at Vaudreuil.Advance studies on double digestion,hydrogen and electric calcination.Commence construction of hydrogen calcination industrialisation demonstration at Yarwun.Minerals processing:commission Blue Smelting demonstration plant at R
57、TIT,Quebec,to test ilmenite pre-reduction process.Commence industrial trials of biochar at RTIT Quebec Operations and RBM,and investigate options to develop a sustainable supply chain.Commission plasma burner pilot at IOC.Diesel transition:progress plans to convert the entire fleet at Boron to renew
58、able diesel ahead of the requirement to do this in California in 2024.Develop a viable trolley assist option for the existing haul fleet to enable substantial reduction in diesel use while on trolley.Nature-based solutions:conduct feasibility studies for the development of five carbon offset project
59、s.1.Our net zero commitment applies to our Scope 1 and 2 emissions only.For planning purposes,we define short-term as up to two years,medium-term as 2-10 years and long-term as beyond 10 years.For our analysis of physical climate risks,we define short-term as 2030,medium-term as 2050 and long-term a
60、s 2100.Climate Change Report 2022|62.Scope 3 emissions goals and customer engagementOur approach to addressing Scope 3 emissions is to engage with our customers on climate change and work with them to develop and scale up technologies to decarbonise steel and aluminium production.Progress in 2022Ste
61、el value chain Engaged with nearly all our direct iron ore sales customers(representing two thirds of our total iron-ore related Scope 3 emissions).This has led to decarbonisation collaboration and projects with customers accounting for 59%of our direct iron ore sales.Partnerships on track.We advanc
62、ed 49 projects,together with over 30 partners.Aluminium value chain Initiated engagement with customers representing nearly all of our bauxite sales.Shipping 30%reduction in emissions intensity achieved(relative to 2008 baseline).On track to exceed target through energy saving initiatives and use of
63、 transitional fuels(biofuel/LNG).Accelerating development of end-state fuels(green methanol and green ammonia)via partnerships.Completed installation of energy savings devices on first vessels capable of 10-12%emissions reductions.Actions in 2023Steel value chain Progress work on a microwave lump dr
64、ying pilot plant with Baowu.Develop BioIronTM at a larger scale,via a specially designed continuous pilot plant.Complete concept studies with BlueScope and determine the next phase of processing Pilbara ores with hydrogen and a melter.Aluminium value chain Agreement to hold workshops on decarbonisat
65、ion confirmed with three major customers representing over half of our sales.Further engagement with other bauxite customers will depend on the level of interest.Shipping Review biofuels plan following completion of 12-month trial.Progress partnerships on end-state fuels.Advance programme to install
66、 energy savings devices on our vessels during dry-docking.Incorporate(over 2023-24)nine LNG dual-fuel chartered vessels into our fleet.Advance iron ore green corridor development in partnership with the Global Maritime Forum.3.Capital allocation alignment with our 1.5C decarbonisation strategyWe est
67、imated that we will invest$7.5 billion in capital between 2022 and 2030 to deliver our decarbonisation strategy(approximately$1.5 billion over the period 2022 to 2024).We also expected our incremental operating expenditure to support the CAP to be in the order of$200 million per year,including resea
68、rch and development initiatives.For example,we planned to spend about$50 million on our iron and steel decarbonisation initiatives in2022.Progress in 2022 Our capital expenditure on decarbonisation projects in 2022 was$94 million compared to an originally estimated spend of$500 million.Our increment
69、al operational expenditure to support the CAP including spend on steel decarbonisation initiatives,was approximately$140 million.Operational expenditure on steel decarbonisation initiatives was$24 million in 2022.Resourcing constraints,COVID-19 lockdowns and the need to develop the business case for
70、 some technologies has delayed someprojects.Actions in 2023 Depending on project planning,approvals and implementation,we estimate that our capital expenditure on decarbonisation will increase over the three years to 2025 and total$1.5 billion.Our incremental operational expenditure in 2023 is estim
71、ated to be$200 million for the six abatement programmes and offset development.4.Climate policy engagementWe continue to encourage our industry associations to align their advocacy with the goals of the Paris Agreement.We review the climate advocacy of our industry associations each year,and we publ
72、ish our review on our website and consider it when we decide whether to renew our memberships.Progress in 2022 We published our review of industry associations in February 2022 and conducted an interim and year-end review of their advocacy.We engaged with four industry associations to discuss their
73、climate advocacy.Actions in 2023 In 2023,we will publish our review of industry associations and maintain our engagement with them on climate advocacy.5.Climate governanceIn the short-term incentive plan(STIP),safety,environment,social and governance matters,including climate change,are now assigned
74、 an explicit performance weighting of 35%,of which 20%relates to safety and 15%to ESG.The“E”component is 5%of the STIP and relates entirely to climate change performance objectives.Progress in 2022 In 2022,the business approved or delivered Scope 1 and 2 abatement projects that would contribute 0.29
75、Mt CO2 of abatement towards the 2025 target against a target of0.8Mt.Achieved specific milestones relating to steel decarbonisation,zero-carbon aluminium and shipping.Actions in 2023 Climate change performance objectives are assigned an explicit performance weighting of 10%in the STIP in 2023.We wil
76、l assess progress of moving carbon abatement projects through the various stages of development all the way to execution to meet our decarbonisation ambition.6.Just transitionWe are committed to supporting a just transition to a low-carbon economy that is socially inclusive and provides decent work
77、and livelihoods.Progress in 2022 In 2022,we established an Executive Comittee-sponsored cross-functional just transition working group,undertook an assessment of our current just transition maturity,and developed a tool to profile risks and opportunities at our assets.Actions in 2023 In 2023,our pri
78、orities include assessing just transition-related risks and opportunities across our assets;defining just transition principles;awareness-raising across the business;and continued engagement with civil society organisations,host communities,employees and others.7.TCFD disclosureWe support the TCFD r
79、ecommendations and are committed to aligning our disclosures with the Climate Action 100+(CA100+)Net Zero Company Benchmark in 2023 reporting.Progress in 2022 Climate-related disclosures on governance,strategy,risk management,and metrics and targets were integrated into the 2021 Annual Report.Our CA
80、P aligns with the CA100+Net Zero Company Benchmark.Actions in 2023 We will continue to publish our progress on climate change annually in line with the recommendations of the TCFD.7Climate Change Report 2022|Climate Change Report 2022We have positioned the low-carbon transition at the heart of our b
81、usiness strategy to strengthen ourlong-term resilience and pursue new growth opportunities.Inaddition tosetting ambitious 1.5C-aligned emissions targets for our operations,our strategy aims to help decarbonise our value chains and provide the materials essential for the energytransition.Our strategy
82、 and approach to climate changeOur approachTo capture new growth opportunities in materials with strong low-carbon transition-related demand:Our ambition is to increase disciplined capital growth of up to$3.0 billion annually by 2024to 2025.We will seek to grow further in copper and battery material
83、s and bring additional tonnes of high-grade iron ore and low-carbon aluminium to market.To work with our customers to tackle full value chain emissions:We will increase research and development of cleaner products.We will partner with our customers to help them meet their Scope 1 and 2 emissions goa
84、ls.To strengthen our alignment with the Paris Agreement and our long-term ambition of achieving net zero emissions by 2050:We aim to reduce our Scope 1 and 2 emissions by 15%by 2025 and by 50%by 2030.We expect to invest an estimated$7.5 billion in decarbonisation projects,predominantly in the second
85、 half of thedecade.Grow production of materials enabling theenergy transitionDevelop products and technologiesthat help our customers decarboniseAccelerate the decarbonisation ofour assetsGlobal scenariosOur scenario approach is reviewed every year as part of our Group strategy engagement with the B
86、oard.We have recently updated our scenario framework to focus on two prevailing macro-level business concerns:the speed of global economic growth and the trajectory of climate action,each heavily influenced by global geopolitics and governance.Our two core scenarios(Competitive Leadership and Fragme
87、nted Leadership)are used to generate a central reference case for commodity forecasts and valuations.Additional scenarios(including our Paris-aligned Aspirational Leadership scenario)are used to further evaluate the positive and negative effects of the energy transition across our portfolio and stre
88、ss test investment decisions.We determine the approximate temperature outcome in 2100 by comparing the emissions pathways to 2050 in each of our scenarios with those set out in the Shared Socio-economic Pathways(SSP)by the Intergovernmental Panel on Climate Change(IPCC).We do not undertake climate m
89、odelling ourselves,but we are consistent with the estimates for temperature and cumulative temperature between 2020 to 2050 in the SSPs.The emissions pathway of Aspirational Leadership is most closely aligned with the IPCCs shared socio-economic pathway 1(SSP1-1.9)with emissions reaching net zero by
90、 2050,which limits warming to 1.5C.Competitive Leadership is most closely aligned with SSP1-2.6(approximately 2C of warming)and Fragmented Leadership is aligned with emission scenarios SSP2-4.5(temperatures exceeding 2.5C by 2100).We also use the IPCCs highest emissions scenario(SSP5-8.5)when assess
91、ing the physical risks of climate change.So,when assessing risks and opportunities to the business we use a 1.5C-aligned scenario to assess a fast low-carbon transition and we use the highest emissions and high temperature outcome scenario(SSP5-8.5)to assess physical climate risks.While there are ma
92、ny uncertainties about how a changing climate may negatively affect gross domestic product(GDP)growth,physical impacts of climate change are integrated into the GDP growth assumptions in our three scenarios.These are most significant in Fragmented Leadership and least significant in Aspirational Lea
93、dership.Thesteel sector Our strategy and approach to climate change are informed by a deep analysis of the interplay of global megatrends,explored through the lens of plausible global scenarios.These set the context for our industry and underpin our commodity price outlooks,portfolio and capital all
94、ocation choices,and how we operate as a business.We recognise our success relies on our ability to strengthen our resilience to the physical,societal and economic effects of climate change and the energy transition while building partnerships and capabilities that enable us to secure new opportuniti
95、es.Our strategy has three pillars,each backed by a series of commitments and ambitions.Our approach is supported by strong governance,with a focus on creating streamlined processes and building capabilities,including in green materials processing,renewable energy deployment and nature-based solution
96、s,which are expected to enable us to reach net zero emissions from our operations by 2050.Thethree pillars of our strategy inform our Climate Action Plan,which aligns with the CA100+Net Zero Company Benchmark and was approved by our shareholders at our 2022 AGMs.transition scenarios in the value cha
97、in section of this report are presented to highlight the roles and timing of different low-carbon steelmaking technologies and to develop projections of our potential future Scope 3 emissions from processing our ironore.At the UN Climate Summit in late 2022(COP27),there was broad recognition that th
98、e pace of decarbonisation across the global economy is too slow to limit warming to 1.5C and that current climate policies in many countries are not yet aligned with their stated ambitions.Consequently,neither of our two core scenarios are consistent with the expectation of climate policies required
99、 to accelerate the global transition to meet the stretch goal of the Paris Agreement.Although our operational emissions reduction targets align with the goals of the Paris Agreement,ourtwo core scenarios do not.Therefore,we also assess our sensitivity and the economic performance of our business aga
100、inst our Aspirational Leadership scenario,which reflects our view of meeting the stretch goal of the Paris Agreement.Our approach to climate change is intrinsically linked with our four objectives:to be best operator,to achieve impeccable ESG credentials,to excel in development and to strengthen our
101、 social licence.Delivering on our climate commitments will rely on these capabilities and will also help build our reputation as a partner of choice for new growth opportunities created by the energy transition.Climate Change Report 2022|8Table 1:Key scenario metricsAspirational Leadership1.5CCompet
102、itive Leadership2CFragmented Leadership2.5C2030 outcome2021-2050 CAGR2030 outcome2021-2050 CAGR2030 outcome2021-2050 CAGRGlobal average carbon prices1 in 2030,(2021 US$/t CO2 eq)599.3%428.0%422.9%Global emissions,Gt CO2 eq39.5-11%249.9-3.5%48.3-0.8%Global energy demand,mtoe10,4800.3%10,9850.5%10,307
103、0.2%Global GDP growth(PPP),%4.4%3.9%4.3%3.8%2.9%2.2%Energy intensity of global GDP,toe/$1000 2015 PPP0.07-3.4%0.08-3.2%0.08-2.3%Carbon intensity of total energy,gCO2/MJ42.1-12.7%46.5-5.0%46.4-1.9%Global energy from electricity,mtoe2,8803.9%2,9363.9%2,6681.8%Global wind and solar capacity,GW9,84510.6
104、%7,47610.0%5,7327.1%Electric vehicle(EV)sales(%)368.1%10.6%63.9%10.4%38.8%9.5%1.Carbon prices are used as a proxy for a broader range of climate policies.2.11%p.a.decline in CO2 emissions based on 2021-49 period in net zero pathway(by 2050).Emissions in 2030 are highest in Competitive Leadership due
105、 to high GDP growth.3.2021-50 CAGR based on global electric vehicle sales.Group scenario global GHG pathways compared to IPCC scenarios(temperature outcomes in 2100)Fragmented Leadership is characterised by limited progress on policy reform with volatile low growth.The business environment is define
106、d by weak final demand and greater uncertainty,and requires close ties with governments to manage risk.It is a world defined by geopolitical and domestic tensions,spurred by populist agendas that offer leaders little opportunity to build consensus around reform and environmental agendas.Nations even
107、tually achieve their 2030 Nationally Determined Contributions(NDC)as agreed in Paris in 2015 but abandon further progress toward long-term carbon goals as outlined at COP26 in Glasgow.Climate policy is insufficiently ambitious to incentivise significant mitigation in industrial sectors resulting in
108、flat global emissions post-2030;consequently global warming exceeds 2.5C and the physical impacts of climate change limit GDP growth in this scenario.Competitive Leadership reflects a world of high growth and strong climate action post-2030,with change driven by policy and competitive innovation.A p
109、roactive reform environment encourages stronger business innovation,higher investment and improved productivity.This allows global GDP to continue growing at close to recent historical levels with a growing contribution from India and other developing countries.The increasing prevalence of major cli
110、mate events after 2030,and ongoing pressure from civil society organisations and businesses to provide policy certainty,continue to galvanise national and international climate action.As a result,nations drive against historical precedent toward achieving their Glasgow Climate Pact commitments,resul
111、ting in global GHG emissions falling from 54 Gt CO2e today to 21Gt in 2050.Aspirational Leadership reflects a world of high growth,significant social change and accelerated climate action with all countries setting new NDCs that collectively achieve net zero emissions by mid-century.Domestic politic
112、s is driven by demands for economic prosperity,social justice and environmental action.Despite geopolitical differences,major economies tend to work together through multilateral frameworks and proactively work towards limiting temperature change to 1.5C.This results in developed economies and China
113、 leading from the front,implementing large increases in carbon pricing,sharply lowering the material intensity of their economies and providing strong financial support to low-income economies.The Aspirational Leadership sensitivity is designed to reach net zero by 2050,and to help us better underst
114、and the world on a 1.5C pathway and what this would mean for our business.Different IPCC scenarios represented in light grey lines specific to temperature range across different scenarios-50607080200020040205020002004020502000200402050Aspirational Leadersh
115、ip(1.5 C scenarios)Competitive Leadership(1.9 C to 2.1 C scenarios)Fragmented Leadership(2.6 C to 3.0 C scenarios)Gt CO2e9Climate Change Report 2022|Climate Change Report 2022Price range across scenariosUpperLowerFinished steelIron ore:65%finesDemandPrice ranges0.51.-392040-50+2808010012
116、002202402602020203020402050%Producing materials essential for the low-carbon transitionThe energy transition is a key driver of commodity demand today and will continue to be so over the next two decades.This will come on top of the demand growth from continued urbanisation and industrial
117、isation(particularly in emerging economies)and it will trigger a new phase of demand growth in developed economies,which have faced saturating demand over the past two decades.In all scenarios,Chinas steel demand growth is forecast to slow as its economy matures.This is offset by construction growth
118、 in India and Southeast Asian countries.Steel demand is strongly driven by urbanisation and GDP growth and less exposed to the green energy transition than copper and aluminium.Wind turbines have a higher steel intensity than conventional generation,but the shift to electric vehicles will reduce ste
119、el demand in the automotive sector in favour of aluminium.Even by 2050,weexpect that more than half of future crude steel production will remain based on iron ore(compared to about two-thirds today).In Fragmented Leadership,global iron ore demand remains broadly flat.Theabsence of challenging carbon
120、 targets keeps premiums for high-grade ores around their historical norms.Prices for both 62%Fe fines and high-grade 65%Fe fines are subdued.In Aspirational and Competitive Leadership scenarios,stronger underlying GDP and construction demand growth support prices and offset the rising use of scrap m
121、aterials.In both of these scenarios,the transition to low-carbon steelmaking will be accompanied by an increase in premiums for high-grade iron ores(eg 65%Fe fines)as current low-carbon steelmaking technologies are relatively inefficient at processing unwanted contaminants in iron ore.This is more m
122、aterial in Aspirational Leadership due to the higher carbon penalties imposed.Price differentials for low quality iron ores are also likely to widen.The commodities we produce have a vital role to play in the low-carbon transition.Copper demand will rise with the renewable electrification of energy,
123、and lithium will be a fundamental ingredient in batteries and grid-firming energy storage solutions.Demand for aluminium will grow for uses like energy-efficient lightweight electric vehicles.Steel demand is primarily driven by urbanisation and industrialisation it correlates with GDP growth and is
124、less exposed to the low-carbon transition than other commodities.It will be essential in a range of applications,from high-speed rail networks to wind and solar support structures,and green hydrogen production facilities.The production of green steel will also bolster demand for high-grade iron ore.
125、While the low-carbon transition is expected to create additional demand for our commodities,the outlook for demand varies significantly between our scenarios as a function of GDP growth,technology uptake,and scrap supply and use.Different demand trajectories,combined with industry supply responses a
126、nd global carbon policy evolution,determine the market prices for our three major commodities and implications for our Group-level and asset valuations,as shown below.Price range across scenariosUpperLowerIron ore:62%fines-392040-50+0.51.5KeyAspirational LeadershipCompetitive LeadershipFr
127、agmented LeadershipClimate Change Report 2022|10Price range across scenariosPrice range across scenariosUpperUpperLowerLower In Aspirational Leadership and Competitive Leadership,traditional and energy transition demand in the transport and electricity sectors doubles demand for aluminium semi-fabri
128、cated products over the next three decades.Thissupports aluminium prices over all time horizons.As higher global carbon penalties materialise,the overall industry cost structure will move upwards,further supporting prices in these two scenarios.In Fragmented Leadership,constrained economic growth an
129、d limited climate action suppress growth in aluminium demand to more moderate levels.Share of secondary recycled material rises from 28%today to 45%by2050.Copper demand rises by 65-150%by 2050 across the three scenarios.Copper benefits from the rapid adoption of electric vehicles and growth in solar
130、 and wind generation,which all have higher copper intensities than conventional technologies.These are key demand drivers in Aspirational and Competitive Leadership scenarios.Copper prices are expected to be higher than historical norms over the next two decades.This is most pronounced in Aspiration
131、al and Competitive Leadership scenarios due to higher demand requirements.In the 2040s,prices decline in real terms due to moderating demand growth and greater use of scrap material,which rises from 31%today to 40%by 2050 across the scenarios.Implications for RioTintos portfolio and operationsWe aim
132、 to invest in quality assets that give robust returns under our scenarios,creating a resilient portfolio with a significant upside to the energy transition.We have continued to invest in our copper portfolio through traditional assets such as Oyu Tolgoi and Kennecott,as well as early-stage applicati
133、on of our Nuton copper leaching technology.Inaluminium,we continue to develop emissions-free smelting technology with ELYSISTM trials,as well as working to reduce the emissions of our existing capacity(see the section on Scope 1 and 2 below).In iron ore,Simandou will become a major supplier of high-
134、grade iron ore that can be used in DRI-EAF steel processing and complement our existing product mix.Inother commodities,we are evaluating a range of opportunities to produce lithium(including at Rincon and Boron),as well as making demonstrable progress on various critical mineral developments that a
135、re essential for the energy transition.This alignment with the low-carbon transition is reflected in the financial resilience of our portfolio across all scenarios considered.Ourestimate for Group value in the Aspirational Leadership scenario lies between those for Fragmented and Competitive Leaders
136、hip.Thisreflects higher estimated valuations for our copper and aluminium businesses in Aspirational Leadership,based on the above price profiles,offset by higher expected carbon penalties across our operating jurisdictions,and lower prices for lower-grade iron ore products.The same pattern holds fo
137、r EBITDA margins at Group level.AluminiumCopperDemandDemandPrice rangesPrice ranges-392040-50+0.51.-392040-50+0.51.528080002602020203020402050%28080002602020203020402050%Note:Real 2022 prices.We do not publish our commodity price for
138、ecasts as this would weaken our position in commercial negotiations and might give rise to concerns from regulators and market participants.11Climate Change Report 2022|Climate Change Report 2022Our portfolio risks and opportunities in the low-carbon transitionIron oreCopperAluminiumStrong GDP growt
139、h and accelerated EV penetration and global electrification(backed by renewable electricity)support demand growth and margins across the portfolioStrong GDP growth and EV penetration support demand with value upside for hydro-based smelters(more pronounced in Aspirational Leadership)Lower demand gro
140、wth and poor carbon policy reduce margins and upside for low-carbon smelting and refining(Kennecott and Escondida)China slowdown and increasing self-sufficiency reduce demand for seaborne bauxitePressure to meet rapid demand growth supports growth projects(and Nuton)if they satisfy environmental and
141、 social requirementsEnvironmental and social approval hurdles for new projects including Resolution Copper and La GranjaHigher carbon penalties support ELYSISTM,hydro-based smelting assets in Quebec and repowering projects in AustraliaGeopolitical tensions could reduce joint venture partnership oppo
142、rtunities and create potential engineering,procurement and construction(EPC)and logistical issuesSlowing demand and low carbon penalties greatly reduce value upside of ELYSISTM and hydro-based smeltersCompetition to secure large-scale firmed renewable electricity to repower coal-based Pacific Alumin
143、ium OperationsAspirational LeadershipCompetitive LeadershipFragmented LeadershipLower medium-run demand versus Competitive Leadership due to higher scrap-use affecting Pilbara products(recovers post 2040)Strong global GDP growth and continued urbanisation support iron ore demand including for Pilbar
144、a productsSlowdown in China and global GDP growth erode demand,creating margin pressure across the portfolioMineralsAccelerated uptake of EVs and battery storage solutions supports growth projects(Rincon and Tamarack joint venture)Reduced battery material growth opportunities but resilience from ope
145、rating high-grade TiO2 and borates assetsStrong outlook for battery materials but international competition for greenfield and mergers and acquisitions opportunities limit growth optionsIncreasing ESG scrutiny of new projects and more stringent regulationsCarbon penalties for downstream processing o
146、f TiO2 and battery materialsSupply disruption risks and volatility bolster demand for precious metal and critical mineral by-productsLarge increases in carbon pricing and penalties drive demand for high-grade iron ore supporting Simandou and IOCStronger customer preference for Simandou and IOC ores
147、for lower-carbon traditional and emerging steelmakingSmall and regional increases in carbon prices help preserve longer-term margins for low-cost,Tier 1 Pilbara oresKey:risks&opportunities tableHigher opportunityHigher riskModerate opportunityModerate riskClimate Change Report 2022|12Producing mater
148、ials essential for the low-carbon transition continuedClassifying our portfolio:revenue,capital expenditure(capex)and operating assetsWe classify commodities into five categories based on climate-related transition risks and growth opportunities:Type 1(highest transition-related demand):lithium,grap
149、hite,cobalt,nickel Type 2(other transition materials):copper,aluminium(including alumina and bauxite),manganese,zinc,other minerals Type 3:iron ore Type 4:metallurgical coal Type 5(highest transition-related risk):thermal coalType 1 and Type 2 materials align with a draft classification proposed by
150、the investor coalition Climate Action 100+.Having divested the last of our coal businesses in 2018,we are orienting our growth capex towards materials that enable the energy transition,including copper,lithium and high-grade iron ore.Our ambition is to increase our growth capital to up to$3 billion
151、per year in 2024 and 2025,developing new options and finding innovative ways of bringing projects onstream faster.Growth capex in iron ore relates to higher-grade ore from projects such as Simandou.Capex on mine development at Gudai-Darri and the Western Range is included in total capex.2022Producti
152、on(Mt Cu eq)Revenue1($m)Growth capex($m)Total capex($m)Operating assets($m)Type 1(lithium,graphite,cobalt,nickel)001515835Type 2(copper,aluminium,otherminerals)2.4625,2894823,47134,264Type 3(iron ore)2.4533,11503,26519,263Type 4(metallurgical coal)00000Type 5(thermal coal)000001.Revenue includes sha
153、re of equity accounted unit sales and intra-subsidiary/equity accounted unit sales.13Climate Change Report 2022|Climate Change Report 2022Reducing the carbon footprint of our operationsWe are working to decarbonise our operations to strengthen our alignment with the goals of the Paris Agreement.In 2
154、022,we did not advance our abatement projects as fast as we would have liked;however,our Scope 1 and 2 emissions fell to 30.3Mt CO2e,which is 7%below our 2018 equity emissions baseline.Ambitious targets aligned with 1.5COur targets are to reduce our Scope 1 and 2 emissions by 15%by 2025 and by 50%by
155、 2030(relative to 2018 levels),and to reach net zero by 2050.These targets cover more than 95%of our operational emissions and are on an equity basis.We will continue to adjust the 2018 baseline to exclude reductions achieved by divesting assets in the future,and to account for acquisitions.For exam
156、ple,following the acquisition of TRQ in December 2022,we increased our equity in the Oyu Tolgoi copper mine from 33%to 66%,which will result in an increase in our baseline and target trajectory in our 2023 reporting(seedata tables for further detail).In the Glasgow Climate Pact adopted at COP26,gove
157、rnments resolved to pursue efforts to limit the global temperature increase to 1.5C.The Pact states that this“requires rapid,deep and sustained reductions in global greenhouse gas emissions,including reducing global carbon dioxide emissions by 45%by 2030 relative to the 2010 level and to net zero ar
158、ound mid-century,as well as deep reductions in other greenhouse gases”.This is consistent with the IPCCs Special Report on 1.5C that sets out multiple pathways to limiting warming to 1.5C,which average around net zero emissions by 2050.While there is no universal standard for determining the alignme
159、nt of targets with the Paris Agreement goals,we conclude that our Scope 1 and 2 targets for 2030 are aligned with efforts to limit warming to 1.5C.In 2021,KPMG provided limited assurance over the alignment of our Scope 1 and 2 targets with efforts to limit warming to 1.5C.They also provided assuranc
160、e of the roadmap to delivering those targets(asset out in our 2021 Climate Change Report).For this 2022 report,KPMG provide limited assurance over our progress reporting against our 2022 Climate Action Plan commitments(inaddition to their assurance of our Scope 1,2 and 3 emissions).Their statement i
161、s included at the end of the report.Our Scope 1 and 2 emissions in2022In 2022,our Scope 1 and 2 emissions were 30.3Mt CO2e(31.0Mt in 2021),a reduction of 7%below our 2018 baseline.This is primarily the result of switching to renewable power at Kennecott and Escondida in prior years,as well as lower
162、than planned production from the Kitimat and Boyne aluminium smelters in 2022.We purchased renewable electricity certificates at Kennecott in the US and switched to renewable electricity contracts at the Escondida mine in Chile(managed by BHP;Rio Tinto owns 30%).In contrast to many of our peers,abou
163、t 80%of our emissions are driven by processing and producing metals and minerals,which are high temperature,hard-to-abate activities.The remaining 20%are from our mining operations.The four most significant sources of our operational emissions are electricity at 41%(purchased and generated),carbon a
164、nodes in aluminium-and reductants in titanium dioxide furnaces at 21%,fossil fuels for heat at our processing plants and alumina refineries at 20%,and diesel consumption in our mining equipment and rail fleet at 13%.The carbon intensity of our assets varies widely across our portfolio,and largely re
165、flects the balance between mining and processing activities.Most of our assets already sit at the low end of their respective commodity carbon intensity curves(see charts in appendix).Operations with a predominant mining and logistics focus are less carbon intensive,while refining and smelting opera
166、tions are high-temperature,energy-intensive processes.Consequently,approximately 70%of our emissions today are from our aluminium business.Largely because of the high energy intensity of the aluminium business,our Group-wide consumption of electricity is about four times that of other global diversi
167、fied mining majors.However,our share of renewable electricity consumption is high and we are making investments and supply decisions to increase this.We are reviewing our Scope 2 reporting and moving towards dual location-based(using grid averages)and market-based(using supplier-specific emissions f
168、actors)reporting in 2023,at which time the percentage of renewables we consume will also be recalculated using the updated assumptions.Climate Change Report 2022|14Progress towards our 2025 target slower than plannedWe did not advance the actual implementation of our abatement projects as fast as we
169、 would have liked last year,so our capital expenditure(capex)on decarbonisation projects was$94 million,lower than we anticipated when we set our targets.Challenges have included late delivery of equipment,resourcing constraints impacting study progress,construction and commissioning,and projectread
170、iness.So far,we have reduced our Scope 1 and 2 emissions by 7%below our 2018 baseline.Weexpect carbon emissions increases of 1.5Mt CO2 as we grow production between 2023 and 2025.Overall,we therefore estimate a need to plan,develop and implement 4.2Mt CO2 of abatement projects to meet our 15%emissio
171、ns reduction target by 2025 categorised as follows:0.6Mt CO2 from projects already approved but not yet executed 0.9Mt CO2 from projects yet to be approved but in advanced planning 2.7Mt CO2 from projects in early stages of design and planning.2022 Scope 1 and 2 emissions by operations and source(eq
172、uity basis)There are risks and dependencies to delivering the projects to achieve our 2025 and 2030 targets.Many of the abatement projects identified are at early stages of development and it may be months or years before they reach final investment decision,construction and operation.Others may dep
173、end on local approvals or require collaboration with a wide range of stakeholders to achieve the large-scale low-carbon transformation that we are aiming for.The breakdown of our abatement projects above assumes that the full abatement potential is delivered on schedule.However,our experience sugges
174、ts that there will be delays and that we will require a more significant use of offsets to achieve our 2025 target.We still have much work to do to progress our abatement projects and we continue to aim for our 2025 target to maintain focus within the organisation and drive action across ourportfoli
175、o.Our pathway to our 2030 target:6+1 abatement programmesBetween now and 2030,the two most important decarbonisation levers are firstly,switching the electricity we generate and purchase to renewables,and,secondly,addressing emissions related to process heat at our alumina refineries and minerals pr
176、ocessing operations.Beyond 2030,we aim to achieve deeper reductions on the pathway to net zero as we deploy ELYSISTM and phase out the use of carbon anodes at our aluminium smelters,as well as progressing low emissions trucks and mobile equipment at our miningoperations.We face continuing challenges
177、 to improve thecommercial returns and overall readiness ofmany of our abatement projects.The commercial returns of abatement projects will also be influenced by local carbon prices,which currently remain relatively low in many ofthe countries where we operate.In 2022,we established six abatement pro
178、grammes,with dedicated people,to focus on the decarbonisation challenge across our product groups:repowering our Pacific Aluminium Operations,renewables,aluminium anodes ELYSISTM,alumina process heat,minerals processing and diesel transition.Weare also increasing our investment in our Nature Solutio
179、ns team and now expect high integrity offsets to play a greater role in our decarbonisation strategy.As a result of the six programmes plus our investment in nature-based solutions(NbS),weare now better placed to make complex structural changes to our energy system by 2030,as we work towards our amb
180、itious target that is aligned with the stretch goal of the ParisAgreement.Electricity1 41%Anodes and reductants21%Process heat20%Mobile dieselOther213%4%of totalAluminium 48%Bauxite&alumina 21%Minerals 13%Iron ore1 10%Copper 5%Shipping&corporate functions 2%30.3MtMt CO2e1.Our Iron Ore product group
181、is primarily our operations in the Pilbara and includes some salt production.Our Minerals product group includes the Iron Ore Company of Canada(IOC).Our 2022 equity emissions do not include the additional equity share of the Oyu Tolgoi mine that was purchased in mid-December 2022.2.Other includes pe
182、rfluorocarbons and land-based emissions.Note the sum of the categories may be slightly different to the total due to rounding.15Climate Change Report 2022|Climate Change Report 2022Decarbonising electricity:repowering Pacific Aluminium OperationsA continued shift to renewables is central to meeting
183、our 2030 targets and will remain an important area of focus beyond 2030.The Boyne smelter and Gladstone power station in Queensland,and the Tomago smelter in New South Wales,are part of our Pacific Aluminium Operations and all operate in coal-based power grids.These facilities account for 28%of our
184、Scope 1 and 2 emissions and more than half of our emissions from electricity use.Green repowering solutions are essential to the long-term sustainability of these operations.The scale of the smelters electricity use means that their transition must take into account the impacts on the broader grid a
185、nd overall system requirements.This requires complex technical,commercial and political negotiations balancing the needs of multiple stakeholders.Following the signing of a Statement of Cooperation with the Queensland Government in 2021 to work towards establishing more renewable energy in Central Q
186、ueensland,we began direct market engagement.A formal market request for proposals was undertaken in June 2022 to support the development of large-scale wind and solar power to supply power to the Boyne smelter through the Queensland grid by 2030.This smelter requires 960MW capacity of reliable power
187、 to operate,which equates to at least 4GW of quality wind and solar power capacity with firming.We continue to work with the Queensland Government and energy providers to design a renewable energy solution as we approach the end of our supply contract for electricity generation to the smelter.In 202
188、2,we impaired the remaining full value of the Boyne smelter in Queensland,Australia as a result of reduced capacity and the high cost of energy from the coal-fired power station impacting economic performance.(For further detail of the impairment,see note 4 to the Financial Statements).2030 pathway:
189、emissions reduction potential by major abatement programmeIn September 2022,Tomago Aluminium Company released an expression of interest to develop,invest in or procure long-term traceable renewable energy and dispatchable firm power generation projects or contracts to supply its production assets,an
190、d underpin its decarbonisation strategy and net zero ambition.Decarbonising electricity:renewablesdeploymentAs we increasingly electrify our processes and mobile fleets,these will need to be supplied by green energy.In the Pilbara,we have one of the worlds largest microgrids,underpinned by 480MW of
191、gas-based power capacity and each year we spend approximately$100-200 million on natural gas to power these operations.We are working towards a plan that will enable 1GW of renewable power capacity in the Pilbara by 2030,which will largely displace gas-fired electricity generation and could support
192、the electrification of our mobile fleet as the technology becomes available.In 2022,we announced that we are planning to invest$600 million in the Pilbara to fund construction of two 100MW solar power facilities,one 30MW solar facility1,and 200MWh of on-grid battery storage by 2026.This is in additi
193、on to the 34MW solar farm installed at the recently commissioned Gudai-Darri iron ore mine.When these solar projects are fully operational,they will displace approximately 30%of our gas usage.Developing large-scale renewable projects in the Pilbara requires extensive stakeholder engagement to facili
194、tate studies and approvals.We are working collaboratively with regulators,Traditional Owners and other key stakeholders about potential renewable developments.Some Traditional Owners have actively participated in planning activities including site selection for wind monitoring and ecological studies
195、.In December,the Western Australian Government announced a new multi-pronged approach to fast-track green energyapprovals.Planning for 1GW is ongoing,and in late 2022 we signed early agreements to develop a design for a 100MW solar farm suitable for the Pilbara environment and to better understand a
196、nd plan for potential project risks.Earlystudies and planning for wind farm developments also commenced in late 2022.Our planning effort is also considering our future energy needs to support further decarbonisation requirements.It makes sense for us to invest our own capital to develop renewables i
197、n the Pilbara as we own much of the infrastructure and operate the grid.In other locations,power purchase agreements may be a better option for us as other investors focused on renewables can develop large capacity solutions at a more attractive cost of capital,offering us savings in operating cost.
198、In2022,we signed a 130MW solar power purchase agreement for Richards Bay Minerals(RBM).Further projects are being pursued to help us achieve our 100%renewable power ambition in South Africa.Since we reset our agreement with the Government of Mongolia,we approved an Electricity Supply Agreement to pr
199、ovide Oyu Tolgoi with a long-term source of power from the Mongolian grid.In 2022,we continued our work with the Government to support the development of long-term renewable energy generation options on the Mongolian grid and meet Oyu Tolgois commitment to sourcing power domestically.Long duration(d
200、efined as 8-150 hours)energy storage will be required as we decarbonise our businesses through the adoption of renewable power from wind and solar sources,as they become the dominant source of energy.In2021,we became an anchor member of the newly created Long Duration Energy Storage(LDES)Council tha
201、t was launched at COP26.In 2022,we supported the publication of the LDES Council report on thermal storage(released at COP27)and started two parallel studies to supply green steam to our operations by integrating thermal energy storage with renewable energy.TBU2022 emissions2030 potential abatement0
202、1Pacifc Aluminium OperationsRenewablesAluminium anodes/ELYSISAlumina process heatMineral processingDiesel transition234567897.75.84.71.60.06.24.64.22.10.23.60.52018 emissions baseline32.5Emissions reduction to 2022-2.22022 emissions30.3Growth to 20301.1Abatement programmes-12.3Other required abateme
203、nt(includesNbS)2.82030 emissions(50%reduction)16.2New projects will need to be carbon neutral orhave emissions mitigated elsewhere in theportfolio.Mt CO2e1.In our release dated 30th November 2022 and Capital Markets Day presentation,we announced plans for the two 100MW solar power facilities and omi
204、tted the additional 30MW facility.Climate Change Report 2022|16Reducing the carbon footprint of our operations continuedDecarbonising aluminium anodes:ELYSISTMEmissions from the use of carbon anodes,such as in our aluminium smelters,are 6.3MtCO2e today and a longer-term challenge.We established the
205、ELYSIS partnership in 2018 with Alcoa and with support from Apple and the governments of Canada and Quebec to develop the worlds first carbon-free aluminium smelting process,using inert anodes instead ofcarbon.With the first industrial scale pilot cell smelting zero-carbon aluminium at the ELYSIS In
206、dustrial Research and Development Center,work is now focused on scaling up the ELYSISTM technology towards the demonstration of even larger commercial-size cells.Construction of these prototype cells is underway at the end of an existing potline at our Alma smelter and we expect this to be commissio
207、ned in 2023.The smelting cells will operate on an electrical current of 450kA,which is the commercial scale for many large,modern aluminium smelters.So,between now and 2030,we are deploying ELYSISTM for growth of new zero carbon aluminium smelting capacity rather than to reduce emissions from carbon
208、 anodes at existing smelters.Beyond 2030,we expect to phase out the use of carbon anodes at oursmelters.Decarbonising alumina process heatIn the alumina refining process,we use coal and gas to generate steam in boilers and gas to generate heat for calcination.In 2022,emissions from these sources wer
209、e 4.6Mt CO2e.Our pathway for decarbonisation is through electrification,including the use of renewable energy to create hydrogen.In 2021,we formed two partnerships to research using hydrogen to reduce emissions in alumina refining:a study with the Australian Renewable Energy Agency to assess hydroge
210、n use in industry and support a coordinated approach to developing a local supply chain,and a study with Sumitomo Corporation into building a hydrogen pilot plant at our Yarwun alumina refinery in Gladstone,Australia.In 2022,we continued to progress our studies and are working towards approval for a
211、n industrial demonstration of the use of hydrogen in the calcination process.In 2023,we aim to complete studies on options to electrify steam generation at our Australian refineries,while at Vaudreuil in Canada we will progress towards a financial investment decision to produce steam from electric b
212、oilers.Thermal storage options studies will be delivered in parallel,as our refineries require a continuous source of heat.Several technologies will be investigated that could allow the use of renewable electricity when available to be stored as heat and used later to generate steam for the refinery
213、.At our Queensland Alumina refinery,our potential double digestion project improves energy efficiency,reducing steam demand for therefinery.Decarbonising minerals processingOur minerals processing programme covers titanium dioxide,iron ore pelletisation,boron and lithium.We use energy for heat and c
214、hemical reduction.We developed ilmenite smelting in Sorel-Tracy,Quebec in the 1950s and we have agreed to invest$537 million(C$737 million)to help reduce emissions by up to 70%at the RTIT Quebec Operations.We are working in partnership with the Government of Canada and trialling technological innova
215、tions,including BlueSmelting,a new ilmenite smelting technology that,if successful,would allow us to reduce and eventually eliminate the use of coal in the process.In the shorter term,we are electrifying our sources of heat.We ordered four plasma torches in 2021,and we expect to install these in 202
216、3 to commence a trial at the pelletising plant at IOC in Canada.Weare also investigating the use of biochar as an alternative to coal and have trials testing the use and product quality,while we look at options for sourcing sustainably produced biochar.Diesel transitionEach year we use approximately
217、 1.3 billion litres of diesel in our trucks,trains and other mobile equipment.In 2022,this contributed emissions of 3.6Mt CO2e.We are targeting battery electrification to eliminate these emissions though other technologies will also be important.We expect batteries to develop over time and have been
218、 working with heavy mobile equipment suppliers to develop large battery trucks,while working with others in the mining sector to develop charging solutions for them.The Charge On Innovation Challenge,founded by BHP,Rio Tinto and Vale,is complete.This seeks to accelerate commercialisation of effectiv
219、e solutions for charging large electric haul trucks and we are now working with winning vendors to develop low-carbon solutions.We are leading a sector-wide programme linked to the International Council on Mining and Metalss Innovation for Cleaner,Safer Vehicles,to establish an interoperability fram
220、ework so that battery trucks and charging solutions can develop in parallel and successfully converge.We will trial the first large battery truck in the Pilbara in 2024 and 2025.We are also working with on-road truck and other equipment manufacturers to introduce smaller and more energy-efficient eq
221、uipment into mine sites,including automated road-sized electric trucks.As we progress on electrification,which we expect could be mass-deployed from around 2030,we are investigating using biofuels as an interim step to accelerate our progress towards our 2030 target.In 2022,we advanced our biofuels
222、piloting at Boron,and we are working towards transitioning the fleet to 100%biofuels in 2024.A trial of biofuels is also ongoing at Kennecott.However,a scalable global supply chain for biofuels has yet to be fully developed,and we need to use biofuels that are sustainably produced.Nature-based solut
223、ions(NbS)and offsetsGiven the high cost of emissions reductions and lack of feasible production-scale low-carbon technology solutions for parts of our business,our long-term commitment is for our operations to be net zero emissions by 2050,rather than zero emissions.While prioritising emissions redu
224、ctions at mines and smelters,we are also exploring the role that NbS and offsets can play in our decarbonisation journey.Given the challenges to reduce emissions at our operations noted above,carbon offsets and removals are expected to form a significant part of our decarbonisation strategy this dec
225、ade.Our connection to a large global landholding with unique and varied biodiversity provides us with the opportunity to develop and invest in high-integrity NbS.At scale,high-integrity NbS can play a substantial role in addressing carbon emissions and biodiversity loss,while also providing socio-ec
226、onomic and wellbeing benefits to local communities.We define high-integrity as projects that balance positive outcomes for people,nature and climate and take an integrated landscape perspective.Todo this we are working with communities to implement locally appropriate activities that provide a fair
227、share of benefits to all stakeholders,with robust application of human rights and environmental safeguards,and to secure permanent,additional carbon emissions reductions.This high-integrity definition and associated assessment criteria are based on existing standards for the voluntary market.Togethe
228、r,the definition and criteria guide our two workstreams:a.Developing NbS at,or near,our assetsIn 2022,we completed pre-feasibility studies at five high-potential landscapes near our assets in Australia,Madagascar,South Africa and Guinea.These studies covered a diverse set of landscapes including for
229、ests,coastal dunes,mangroves and pastoral lands.The scale of the first-round projects is significant,with the potential for approximately 500,000 hectares of land under conservation,restoration or sustainable management,and generating up to one million tonnes of offsets per year by 2030.Core to this
230、 work is putting communities at the centre and empowering them to enhance their livelihoods through the protection,sustainable management,and restoration of nature and biodiversity.This approach helps to reduce social and environmental risks of our operations and is highly complementary to our work
231、in theseregions.We are now progressing the first round of sites through feasibility studies including stakeholder engagement and partner identification and completing carbon and biodiversity assessments on the next set of priority sites.b.Securing high-quality carbon credits from the marketGiven the
232、 long lead times to develop our own NbS projects,in parallel we are ramping up commercial activities to secure high-quality carbon credits focusing on regions where our Scope 1 and 2 emissions are highest.Our preference is to have deeper involvement with a smaller number of projects to ensure that w
233、e are retiring high-integrity carbon credits.We anticipate that this will require us to explore a range of upstream partnership models(including long-term offtakes,co-investment and co-development)with high-quality partners and developers.17Climate Change Report 2022|Climate Change Report 2022We hav
234、e developed a set of quality criteria covering the carbon integrity of the project and the social and ecological safeguards that underpin it that form the basis of our NbS project quality due-diligence process.Beyond the voluntary standards,we further test projects using our development criteria for
235、 high-integrity NbS before investmentAccelerating the creation of high integrity nature-based solutions projects in the regions where we operateOur ambitionWorkstreamsIntegrity criteriaThe recent application of these criteria on the North American carbon offset spot market led to more than 80%of pro
236、jects failing our internal due diligence,reinforcing the importance of upstream partnerships.We intend to use these criteria in upstream partnership collaborations to either augment existing projects or shape new projects.In 2022,we worked with a steel producer and bank in China to trial a carbon of
237、fset iron ore cargo1.We used carbon credits sourced from aVerra-certified forest management project(conversion of logged to protected forest)inHubei province to offset the emissions associated with Scope 3 upstream activities,as well as Scope 1 and 2 emissions from mining,rail and marine shipping of
238、 the iron ore to a port in China(this represents less than approximately 5%of the emissions associated with producing steel with that cargo).Carbon capture and mineralisationWe continue to explore carbon capture and mineralisation options leveraging our exploration and geological expertise.Together
239、with Carbfix,we are planning to permanently store carbon underground at our ISAL aluminium smelter in Iceland.Carbfix will use our land surrounding the ISAL smelter for onshore CO2 injection in the worlds first carbon mineral storage hub.Our goal is to use the Carbfix technology to further decarboni
240、se our operations.We have also launched a partnership partly sponsored by the United States Department of Energy with climate technology and research bodies to assess the potential to store carbon dioxide as rock at the Tamarack nickel project in Minnesota.The geology of the Tamarack site holds the
241、potential to permanently store large amounts of carbon captured from the atmosphere or from hard-to-abate industries by mineralising it through natural chemicalreactions.1.The following Voluntary Carbon Units were retired upon delivery of the cargo:-159318418-VCS-VCU-324-VER-CN-14-1935
242、-01--159423014-VCS-VCU-324-VER-CN-14--31122017-1 Develop large-scale NbS projects near our assets in Australia,Madagascar,South Africa and Guinea,using local partners and communities to co-design and implement.Secure long-term quality credits via commercial
243、 deals in regions with significant Scope 1 and 2 emissions(such as Australia,North America)and explore options to move upstream into co-financing/development for long-term security.We assess:intervention viability,developer credibility and medium and long-term management plan(beyond credit period)ot
244、her funding sources and their impact on additionality claims threats to permanence(buffer,leakage assumptions)and use in-region benchmarks baseline credibility and desktop geospatial reviews for NbS projects impacts of upcoming carbon methodology changes that may adversely affect credits ability to
245、source recent and future vintage years monitoring and adaptive management practices for project efficacy and continuous improvement.We ensure that:projects meet RioTintos standards and have Climate,Community and Biodiversity(CCB)certification orequivalent developers community approach is fair.We tes
246、t for Free,Prior Informed Consent(FPIC)and whether benefits distribution is fair and transparent projects do not replace intact eco-systems or introduce invasive species integrated,regenerative landscape stewardship approaches(water,biodiversity,ecosystem services)areprioritised.Social and wellbeing
247、Create sustainable jobs and regenerative micro-economies from NbS projects that we have developed or originatedNatureOriginate NbS projects that result in more than 500,000ha being under conservation,restoration or regeneration by 2025CarbonBuild a sustainable and long-term carbon credit portfolio g
248、enerating approximately 1.7 million tonnes annually by 2030Ensuring defensible carbon baseline and accounting for real carbon reductionsPermanenceAdditionalityQuantificationEcological safeguardsSocial safeguardsEnsuring ecological and social benefitsDevelopDevelop NbS projects on or near assetsInves
249、tSecure credits in heavy emission regionsClimate Change Report 2022|18Reducing the carbon footprint of our operations continuedCapital allocation alignment with our decarbonisation strategyIn 2022,we shifted our focus from multiple projects captured in our marginal abatement costs curve to six abate
250、ment programmes that cut across our product groups.We are prioritising investment in decarbonising electricity and process heat this decade,aswell as developing the technology such as ELYSISTM and low carbon vehicles that will deliver reductions in the longer term.Given the long lead times for these
251、 projects,we now expect offsets to make a greater contribution towards our ambitious targets.We are committed to aligning our future capital expenditure with our 2025 and 2030 Scope 1 and 2 emissions targets.We estimate that we will invest$7.5 billion in capital between 2022 and 2030 to deliver our
252、decarbonisation strategy.Our capital expenditure on decarbonisation is expected to increase over the three years to 2025,reaching an estimated total of$1.5 billion.In 2022,our decarbonisation-related capital expenditure was$94 million compared with an original estimate of$500 million.Our capex on de
253、carbonisation projects in the years from 2023 to 2025 mainly relates to renewables deployment in the Pilbara.Decarbonisation investment across the rest of the Group will accelerate beyond 2025.This capital expenditure includes further decarbonisation of the Pilbara electricity system and other abate
254、ment projects.These projects will deliver a range of economic outcomes but in aggregate are value accretive at a modest carbon price.Most importantly,they safeguard the integrity of our assets over the longer term and reduce the risk profile of our cash flows.We will also work with third parties thr
255、ough long-term contracts,which are not included in the$7.5 billion capital expenditure noted above.These decisions will of course go through the same rigorous investment process we have for all our projects,and we will remain open-minded about the right mix of direct investment and third-party contr
256、acts.In 2022,our incremental operating expenditure to support our decarbonisation work was approximately$140 million compared with an original estimate of$200 million.This includes$24 million on our steel decarbonisation initiatives.Having divested the last of our coal businesses,we are also phasing
257、 out investment in some other carbon-intensive assets.The world will need more aluminium,more copper,more high-grade iron ore and more lithium and this is where we are focusing our growth investments.However,we will only invest in quality assets that will give robust returns under a range of economi
258、c,geopolitical and carbon scenarios,creating a resilient portfolio with significant upside to the energytransition.We are applying similar thinking to our approach to decarbonisation.This aims to de-risk cash flows for the longer term while remaining very disciplined today.We will also be well posit
259、ioned to benefit from any carbon incentives if these are rolled out more widely.Our framework guides our decision making.The framework has five key elements value,materiality of abatement,maturity of technology,competitiveness versus internal and external benchmarks and alignment with the net zero 2
260、050 target.This ensures our investments in abatement projects are phased in the most logical way,prioritising near-term work around energy inputs and where we already see attractive economics.These projects can have very different technical risk profiles from tried and tested to pioneering technolog
261、y and trades-offs between transitionary and long-term solutions.Many require a carbon price to compete at the challenging internal hurdle rate we set for investment.Based on our current assumptions,carbon prices below$100/tCO2e may be enough for us to decarbonise power and support our investment in
262、renewable generation and firming infrastructure.Higher carbon prices and other forms of support are necessary to enable us toaddress harder-to-abate parts of our carbon footprint,such as process heat and carbon anodes,and remain commercially competitive in a global market.We have used a shadow carbo
263、n price of$75 per tonne as part of the investment case for large capital projects;however,we are not using this shadow price to incentivise smaller energy efficiency investments.We will reconsider the merit of using this in evaluations of abatement projects in future.19Climate Change Report 2022|Cli
264、mate Change Report 2022Low-carbon technology innovation“Technology will bring changes we cannot yet imagine we need to remain open-minded and that is why we are taking a portfolio approach to R&D and not focusing on one particular technology to the exclusion of others.”Nigel StewardChief ScientistAd
265、dressing climate change requires us to replace fossil fuels with zero carbon sources of electricity,such as wind,solar,hydropower,geothermal and others.It will also require the electrification of the wider energy system.This transition will increase demand for key minerals and metals that we produce
266、,such as copper,aluminium and iron ore for steelmaking,as well as creating demand for new materials such as lithium.Our strategy is to provide these materials,and we will have to do this with a net zero carbon footprint ourselves.Today,the key materials for the energy transition are not produced wit
267、hout the use of fossil fuels,so we must innovate and create new technology solutions to do so.We have built an industry-leading Technology and R&D organisation,partnering with universities,governments,companies and start-ups to accelerate technology deployment to support our strategy,and already we
268、have delivered some breakthroughs.We are improving our battery materials capabilities,reducing our carbon footprint through biofuel deployment,andpartnering with customers and technology developers to decarbonise steelmaking.We are disciplined in our approach to R&D,with five components to our techn
269、ology roadmap,aligned with our strategic priorities:health and safety,lightening our overall environmental footprint,supporting growth,decarbonising our operations and our products,and improving productivity.On the low-carbon transition we are focused on energy storage;hydrogen;and repowering our ve
270、hicles,trains and ships.And we are using new processing technology to create new growth streams.Our aim is to be the innovation leader in providing materials produced with zero carbon and superior ESG footprint to drive the energy transition.We also strive to be the fastest at translating new ideas
271、into sustained business value.Accessing transformative innovation will require us to take risks,something best done outside the core businesses,which is why we are partnering extensively.We believe our technology innovation and development will bring competitive advantage.Its also imperative to our
272、future success that we build new capabilities and continue to innovate.There are challenges in achieving net zero across our operations,but also opportunities.There is fierce competition and the pathway to success is uncertain.What is certain is that we wont achieve our net zero aspirations without
273、this innovation in technologies and in our products.Over the next 10 years wind and solar deployments will help to address emissions from electricity generation.However,this needs to be firmed to support the 24/7 needs of our operations,especially at our aluminiumsmelters.In the short term,we still
274、see the need for conventional power sources to firm renewable electricity generation.However,new zero-carbon firming or long duration energy storage solutions are being developed this is an active area with many new start up firms innovating in this field.There are four types of long duration energy
275、 storage:thermal,chemical,electrochemical and mechanical.Electro-mechanical storage methods are the only ones capable of storing the large amounts of energy required and then delivering this energy at the power required to our large processing assets and mine sites.Pumped hydropower is such an elect
276、ro-mechanical storage system that is well known and used today where available.We are also tracking new liquid air and compressed air mechanical storage technologies,and pathways are being pursued to make these technologies more economically viable.Energy storageAlternatively,demand will have to be
277、modulated,and we are developing the capability in our aluminium smelters to flex power demand as a function of renewable electricity production.Lithium-ion battery electrochemical storage is cheaper than the new mechanical storage methods,but still remains expensive,and there is insufficient storage
278、 capacity for our sites.Thefirming of electricity via electrochemical storage still requires development and there are many start ups active in the space.Weexpect breakthroughs to be deployable in the 2035-2045 timeframe.The good news is that certain thermal storage technologies can provide firm,low
279、-cost power to our energy-intense alumina refineries and other hydrometallurgical plants that require steam,and we are actively pursuing these technologies at present.Gudai-Darri solar plant.The Pilbara,AustraliaClimate Change Report 2022|20Breakthrough technologies are opening up new revenue stream
280、s for Rio Tinto.Customers increasingly want to know the provenance of their metals and minerals.We have the ELYSISTM zero-carbon aluminium smelting,and at the Alma smelter weve implemented AP4X cell technology,which enables low carbon aluminium production leveraging the highest amperage in its class
281、.At RTFT,we became the first producer of scandium oxide in North America,using an innovative process we developed to extract high purity scandium oxide from waste streams without the need for any additional mining.Scandium is an essential material in aluminium-scandium(Al-Sc)alloys in automotive and
282、 aerospace applications.Weve also produced spodumene,a source of lithium,in a demonstration plant at RTFT.Theprocess used was developed by researchers at our Critical Minerals and Technology Centre,and offers the environmental benefit of not using chemical products and generating only dry,inert resi
283、dues.At Kennecott,weve started producing tellurium a critical mineral used in solar panels from by-product streams generated during the refining process.We expect to use hydrogen as a reductant for zero-carbon steelmaking,for ilmenite reduction at RioTinto Iron and Titanium Quebec Operations(RTIT)an
284、d Richards Bay Minerals,and as a pathway for calcination in our alumina refineries.Atthe moment,though,hydrogen is very expensive and will require a technological breakthrough to be economically viable.Hydrogen is a very energetic material to produce requiring approximately four times more energy pe
285、r tonne than aluminium but it can provide a great deal of energy back to decarbonise some hard-to-abate industry sectors.There will be very high-power requirements to generate sufficient hydrogen to meet future demand;however,the electrolyser supply chain to deliver green hydrogen is not yet well es
286、tablished and it will take time before it will be a material contributor to decarbonisation.While competitive green hydrogen requires very low-cost green electricity at scale,it also needs lower capital costs.We have invested in Electric Hydrogen,a Californian start up that has reduced capital inten
287、sity by a factor of three relative to competitor options through better process design and system engineering,as well as a scientific breakthrough.Where possible we will always seek to electrify our processes as much as we can,for example by using electric boilers to raise steam,rather than using hy
288、drogen as a fuel.This is a far more efficient use of the valuable renewable electricity resource.We lose energy each time we transform an energy from one source to another,and this is what makes direct electrification so compelling and capital-efficient.Therefore,we plan to use hydrogen for its chem
289、ical properties where electrification cannot play a role.Furthermore,we will consume it close to its point of generation to avoid supply chain leakage and energy transformation losses.Processing innovationHydrogenAnother technology weve advanced is copper heap leaching,called NutonTM.It offers the p
290、otential to economically unlock low-grade copper sulphide resources and copper-bearing waste,and achieve higher recoveries on oxide and transitional material.Italso has environmental benefits,including more efficient water usage,lower carbon emissions and the ability to reclaim mine sites by reproce
291、ssing waste.NutonTM technology pilot plant,Bundoora,Australia.21Climate Change Report 2022|Climate Change Report 2022Partnering to reduce the carbon footprint of our value chainsWe need to tackle our Scope 3 emissions,as we fully appreciate that to thrive in the long term we need to be part of net z
292、ero value chains.The best way for Rio Tinto to contribute to the low-carbon transition is to partner with our customers and others in our value chain to develop innovative solutions and help shape demand for low carbon metals and minerals.Our Scope 3 emissions were 584Mt CO2e in 2022 over 1%of the g
293、lobal total.These are primarily from our customers in Asia,processing our iron ore into steel and bauxite into aluminium,so our level of control is limited.Our approach to Scope 3 emissions balances ambition,pragmatism and our level of agency:it is focused on our most significant sources and is grou
294、nded in actions where we can have impact.Complex structural changes are needed in hard-to-abate sectors,such as steel,aluminium and shipping,to transition to net zero.While it is clear that we have a key role to play,we do not set an overall Scope 3 emissions target as we have limited ability to dir
295、ectly influence the production processes of our customers or their customers.In addition,reducing our Scope 3 emissions by shifting our portfolio away from fossil fuels or the natural depletion of coal mines is not an option for us.In 2022,we increased our engagement with nearly all our direct iron
296、ore and bauxite customers and worked with them to optimise their current operations and to develop the low-carbon technologies needed to reduce emissions across our value chains.It is encouraging that this issue remains high on the agenda when we meet our customers.Two things are clear:first,success
297、 will require deep collaboration across the value chain,from iron ore producers to steel makers,as well as technology providers,universities,and industry groups;and,secondly,consistent carbon policy is critical to accelerate the transition.As we develop new capabilities across a wide variety of fiel
298、ds in steel,aluminium and shipping,we are learning from our experience to channel resources into the most promising areas that can have the greatest impact.Thelow-carbon technologies we need in these sectors including BioIronTM,hydrogen as a reductant and green methanol will take years or decades to
299、 develop and implement in partnerships between industries and governments.Progress wont be linear;there will be trade-offs,dilemmas and setbacks on the path to net zero.In 2023,we aim to step up our activities and partnerships to accelerate delivery of real-world outcomes.Each of our technology part
300、nerships has individual goals and targets and our progress towards them is detailed below.Our Scope 3 emissions in 2022Our Scope 3 emissions were 584Mt CO2e in 2022(558Mt CO2e in 2021,restated to be equivalent in methods to 2022).Over 94%of this is from the downstream processing ofiron ore,bauxite a
301、nd other products.Over76%of these processing emissions arise in China,which has pledged to be carbon neutral by 2060,and another 18%come from Japan,South Korea and other countries that have pledged to be carbon neutral by 2050.Estimating our Scope 3 emissions remains challenging,but we have made fur
302、ther improvements in accuracy and completeness in 2022,notably the inclusion of voyage-specific emissions data from chartered ships.Customer-specific emissions data from the 583.9Mt CO2e2022 Scope 3 emissions by category and source(equity basis)26.1 8.8386.6147.315.11%-DRI-EAF83%Purchasedgoods and o
303、ther7%-Coke Production9%-Steel Convertor19%-Sinter Plant64%-Blast Furnace70%-Smelting(electricity)17%-Smelting(anodes and other)10%-Alumina Process heat17%Fuel3%-Refning(electricity)PurchasesIron OreDownstream Customer EmissionsBauxite and AluminiumOtherCustomersMarineFor many of our customers that
304、policy signal is not clear enough.We have seen a significant increase in the number of our customers that are setting public targets for their Scope 1 and 2 emissions(ourScope 3)and have ambitions to reach net zero by 2050.About 50%of our total iron ore sales are to steel producers that have already
305、 set public targets to reach net zero by 2050,up from 28%in 2021.Over 40%of our bauxite sales are to customers that have set net zero emissions targets,though only approximately 5%is to companies that are aiming for net zero by 2050.As these numbers rise,so will our ability to partner through the va
306、lue chain to achieve our common sustainability objectives.An inevitable structural shift toward green steel is underway.In the short to medium term,the industry is predominantly focusing on blast furnace optimisation and we are working closely with customers to support their ambitions.Inthe medium t
307、o long term,the industry will move towards cleaner processing routes such as DRI-EAF1.Steelmakers will increasingly value higher-grade ores with fewer impurities that are more energy efficient to process.Therefore,we are working in partnerships with customers,technology providers,universities and ot
308、hers to develop low-carbon technologies to process our iron ore into steel.This includes exploring DRI pathways using hydrogen and sustainable biomass.We are also working on options to beneficiate and upgrade our Pilbara ores to be better suited to low-carbon steelmaking technologies.1.Direct Reduce
309、d Iron.Climate Change Report 2022|22processing of our products continue to be limited in availability.We are working with a number of suppliers to understand emission factors for larger purchased goods and fuels with a focus on ensuring an equivalent cradle-to-gate boundary as the current factors.Th
310、e full details of our updated approach to estimating Scope 3 emissions and our assumptions are available in our separate 2022 Scope 1,2 and 3 Emissions Calculation Methodology Report on our website.Our Scope 3 downstream processing emissions from bauxite and alumina rose from 144Mt CO2e in 2021 to 1
311、47Mt CO2e in 2022.This is due to an increase in sales to customers in countries with a higher than average emissions factor,as well as more accurate bauxite and alumina customer emissions reporting.Scope 3 processing emissions related to our iron ore rose from 365Mt CO2e in 2021 to 387Mt CO2e in 202
312、2 primarily due to changes in product mix and an increase in iron ore sold.The steel value chainSteel is one of the most cost-efficient construction materials and is essential in low-carbon infrastructure,transportation and buildings.Steel has a similar carbon footprint to hydro-based aluminium toda
313、y on a per tonne of product basis.However,with close to 2 billion tonnes of crude steel produced globally in 2022,the industry overall emits over 3 billion tonnes of CO2 annually,equivalent to around 8%of global carbon emissions.In all our scenarios,we anticipate an increase in the use of steel scra
314、p,especially in China,as the scrap pool rises,although this will depend on quality and quantity.However,even by 2050,we expect that more than half of future crude steel production will remain based on iron ore(compared to about two-thirds today).Meanwhile,blast furnace optimisation will be driven by
315、 the use of higher-grade ores,including iron ore lumps and pellets,as well as the replacement of pulverised coal injection with hydrogen and the oxygen enrichment of the blast air enabling gas recycling.There is no proven process route at an industrial scale to produce primary net zero steel today;h
316、owever,the industry is developingand scaling a range of new technologies.These include hydrogen-based DRI feeding into an electric arc furnace or into a basic oxygen furnace(BOF)via an intermediary melter step,direct smelting,theuse of sustainable biomass,and carbon capture and storage(CCS),as well
317、as more speculativetechnologies such as electrolysis.The speed and scale of deploying these new technologies will depend on technological breakthroughs,trends in capital intensity to close the cost gap with existing production methods,customer willingness to pay and government policies,including car
318、bon prices.The low-carbon transition pathway of the steel industry is uncertain today but can be explored and better understood through scenarios.Oneexample is the scenario analysis presented in Net-Zero Steel Sector Transition Strategy first published in 2021,and updated in September 2022,by the Ne
319、t Zero Steel Initiative(NZSI).NZSI is an industry platform,part of the Mission Possible Partnership,that brings together stakeholders across the whole steel supply chain to help put the sector on a path to net zero emissions by mid-century.The two NZSI net zero-aligned scenarios result in different
320、carbon emission pathways for the steel industry,with reductions ranging from 11%to 33%by 2030,and from 50%to 76%by 2040(in Tech Moratorium and Carbon Cost respectively,compared to the NZSI 2020 baseline).Assuming that the steel industry follows the NZSI Tech Moratorium scenario,our own analysis indi
321、cates that our iron ore-related Scope 3 emissions would fall by 44%by 2035(24%in our 2021 Climate Change Report).This projection includes expected production growth at our Pilbara operations in Western Australia and the Iron Ore Company of Canada and assumes the development of our Simandou project i
322、n Guinea.The greater forecast reduction in Scope 3 emissions versus the 2021 Climate Change Report is due to a range of factors.They include,firstly,refinements to the 2022 NZSI model resulting in increased CO2 reduction via enhanced blast furnace technologies.Secondly,expectation of a faster transi
323、tion to DRI-based steelmaking via the Melter-BOF route and,thirdly,increased future lump proportion from our Pilbara mines would both have the potential to impact Scope 3 targets.Fourthly,the forecast assumes a greater role for Rhodes Ridge joint venture mines in future production.Our focus areas fo
324、r iron and steel decarbonisationOur approach is to pursue and support a range of decarbonisation options aligned with the technology pathways highlighted by the NZSI analysis,through partnerships with our customers,suppliers,universities and research institutes.In 2022,we engaged with nearly all our
325、 direct steel customers(by sales volume).This represents approximately 70%of our total iron ore sales1 and two thirds of our related emissions.We have an engagement tracking framework with customer projects covering 59%of our sales volume.Wehave consolidated these initiatives under six focus areas,w
326、ith coordination from a dedicated Steel Decarbonisation team2 within our Commercial team.This includes beneficiating our Pilbara ores to be better suited to green steel technologies,optimising the traditional blast furnace route to reduce emissions and innovating green solutions using hydrogen and b
327、iomass in a sustainableway.In 2022,we made progress on 49 projects,together with over 30 partners,building technical and commercial optionality for the future across the steel value chain.In 2022,wespent$24 million on our iron and steel decarbonisation initiatives,lower than our planned spend of$50
328、million.We are aiming to increase our investment in our steel decarbonisation initiatives in 2023 and the level of spend will depend on the speed of success of our research and development initiatives.1.The balance includes spot buyers,traders and others procuring from our China portside business.2.
329、Steel Decarbonisation team has 16 people primarily engineers and research personnel,supported by people from our Iron Ore,Development and Technology,Commercial and Business Development teams,working in all our customer markets.NZSI Tech Moratorium scenario technology pathwaySteel production(Mt)2,500
330、2,0001,5001,00050002020202520302035204020452050Blast Furnace(BF/BOF)Smelting Reduction with CCSScrap+EAFAverage TechnologyBest Available technolgy(BAT)BAT with H2 injectionBAT with Biomass PCINatural gas based100%green hydrogenNatural gas with CCS/UNatural gas based100%green hydrogenNatural gas with
331、 CCS/U50%green hydrogenScrap+EAFSmeltingReductionwith CCSDRI+EAFDRI+Melter+BOF23Climate Change Report 2022|Climate Change Report 2022Goals2022 progress2023 objectives1.Blast furnace optimisation99%of our iron ore is processed through the blast furnace route today,the optimisation of which could resu
332、lt in potential carbon emissionreductions of up to 30%.We will collaborate with over 20 customers,includingBaowu,POSCO,Nippon Steel Corporation(NSC)and Shougang,to help them generate those savings as an intermediary decarbonisationstep.This includes pilot work on microwave lump drying with Baowu,and
333、 progressing our partnership with NSC on test work for lump ores and exploring a new grade of pellets.We collaborated with China Baowu on low-carbon steelmaking and research projects.The lump drying technology in Baowus Meigang subsidiary is one of the signature projects.Through the development and industrial demonstration of green and efficientdrying technology for blast furnace lump,the proporti