Former top BHP economist urges tougher government policies to push miners to decarbonise

BHP’s decarbonisation slowdown included options to delay electrification of its polluting diesel trucks. Photograph: Aaron Webber/Alamy View image in fullscreen BHP’s decarbonisation slowdown included options to delay electrification of its polluting diesel trucks. Photograph: Aaron Webber/Alamy Former top BHP economist urges tougher government policies to push miners to decarbonise Exclusive: ‘The preferred policy is, of course, a carbon price,’ Dr Huw McKay says, amid slowdown in BHP action on emissions Get our breaking news email , free app or daily news podcast A former chief economist at mining company BHP says stronger climate policy by governments is needed to “move the needle” and incentivise tough decarbonisation decisions at major resource companies. Internal documents, leaked to Guardian Australia and the ABC earlier this year, showed BHP had delayed vast renewables projects in the Pilbara, scrapped a project that would have delivered significant cuts to global emissions, and war-gamed options to push the electrification of its polluting diesel truck and train fleets into the next two decades. Experts and analysts have previously said the slowdown in BHP’s decarbonisation progress put Australia’s broader climate targets at risk and exposed significant flaws in a key climate policy, the safeguard mechanism . Former BHP chief economist Dr Huw McKay, now a visiting fellow at Australian National University’s Crawford school of public policy, told the Guardian that stronger climate policy was needed to drive urgent action. BHP quietly scrapped plan to build Pilbara plant that would have drastically cut emissions Read more McKay, who left the company in 2024, said he agreed with the distinguished economist and emeritus professor Ross Garnaut, that voluntary commitments from companies on decarbonisation were unstable and strong government policy was needed. Sign up for the Breaking News Australia email “That’s absolutely right,” he said. “The preferred policy is, of course, a carbon price that is calibrated to move the needle on hard-to-abate emissions. “Inserting a carbon-price obligation like that into the investment process at major resources companies would lead to swifter action.” McKay will this month speak at an ANU seminar on “Heavy industry decarbonisation: insights from the BHP leaks”. The description of the event says he will speak about how “corporate goals and targets are set, the role of broader investment and capital allocation processes, and the influence of policy, financial, and operational environments on decision-making”. BHP has set itself a target of cutting emissions to 30% below 2020 levels by 2030, which it has already achieved using power purchasing agreements, particularly in Chile, and through the 2024 suspension of its struggling Western Australian nickel operations. But its longer-term net zero goal requires it to make significant emissions reductions from its mining operations, which can be achieved by transitio