BHP in climate change deal

BHP has agreed to spend up to $US35 million ($A48 million) with steelmaker China Baowu to help reduce greenhouse gas emissions.

The five-year partnership will focus on the development of low carbon technologies and pathways to reduce emissions in the global steel industry, according to a memorandum of understanding signed over the weekend.

BHP’s contribution will tap into its $US400 million ($549 million) Climate Investment Program, established last year.

Both companies will collaborate on technical solutions to utilise low carbon fuel sources such as hydrogen injection in the blast furnace, BHP chief executive Mike Henry said.

“BHP will invest in supporting the development of low emissions technologies, promote product stewardship and partner with others to enhance the global policy and market response to climate change.

“Our investments are focused on actions that can create real change in emissions.”

Mr Henry said BHP was determined to reduce emissions in line with Paris Agreement goals.

The Perth-headquartered business in September awarded the first contract for its LNG-fuelled bulk carrier to deliver iron ore between Western Australia and China, which will reduce emissions by more than 30 per cent per trip.

BHP will establish a Low Carbon Metallurgy Knowledge Sharing Centre alongside China Baowu, which will link and share green development knowledge with the global steel industry.

China Baowu chairman Chen Derong said low carbon and green development would disrupt the traditional steelmaking value chain.

“As a leading company in the sector, China Baowu will take an active role in implementing low carbon technologies, working together with upstream and downstream partners,” he said.

“The global steel industry needs an open platform to jointly explore low carbon technology and roadmaps, as well as showcase to the world the efforts to reshape the steelmaking value chain.”

The deployment of carbon capture, utilisation and storage in the steel sector will also be investigated at one of China Baowu’s production bases under the agreement.

BHP was trading 3 per cent higher at 1:22pm AEDT to $35.82.