18 OCTOBER 2023
Maritime freight is an integral part of our supply chain, and with a long-term goal that includes achieving net zero Scope 3 greenhouse gas (GHG) emissions by 2050, we are working to reduce GHG emissions from the shipping of our products.
Our Climate Change Action Plan highlights focus areas for our approach to Scope 3 emissions through to FY25.
One of those items was to mature our monitoring program for shipping emissions to inform future GHG emissions reduction opportunities.
In FY22, we started to work with Zerolab, a subsidiary of Klaveness, which specialises in the development of new products and business models for decarbonisation, to create an interactive web-based dashboard to monitor GHG emissions from our shipping activities.
In FY23, we began monitoring voyages and have established a database of actual emissions data from over 80 per cent of our shipments, including both upstream and downstream of our operations.
From 1 January 2024, the EU’s Emissions Trading Scheme will cover carbon emissions from shipping, impacting transport costs for our commodities and raw materials shipped to and from the EU. Our emissions dashboard and data allows us to understand the impact on costs and identify opportunities to increase efficiencies to ship our products and raw materials economically and responsibly.
Incentivising lower freight emissions
As part of our contract for Klaveness Combination Carriers (KCC) to ship caustic soda, we have jointly developed a mechanism to link freight paid to the carbon emission performance of KCC’s vessels relative to an agreed baseline.
The implementation of the Carbon Adjustment Factor, which commenced at the start of 2023, results in KCC being paid a higher rate if GHG freight emissions are below the baseline or a lower rate if emissions exceed the baseline.
Any additional freight paid by South32 as a result of this factor will be invested towards improving the energy efficiency of KCC’s fleet.
Our aim is to continue to create new partnerships with our suppliers to reduce GHG emissions in the value chain. We also intend to broaden this work to our customers.
Learn more about our actions to address climate change in FY23, including Scope 3 emissions, in our 2023 Sustainable Development Report.