Independent Senator David Pocock has accused mining giant BHP of literally laughing at Australia’s flagship climate policy, all while cashing in on hundreds of millions in taxpayer-funded diesel tax breaks. The accusation comes after leaked documents - shared exclusively with The Guardian and the ABC - revealed BHP scrapped a major global emissions reduction project, delayed vast renewable energy plans in the Pilbara, and strategized to push electrification of its diesel-spewing truck and train fleets into the 2040s.
This, despite internal memos from as recently as 2023 admitting that “urgent decarbonisation in line with BHP’s public commitments effectively underpins [its] licence to operate.” Apparently, the licence came with an asterisk.
Analysis shows BHP paid less than $9 million under Australia’s safeguard mechanism last year for its excess emissions - while pocketing $622 million in fuel tax credits, including $379 million specifically for its Western Australian iron ore mines. That’s a ratio that makes a tax accountant blush. “They are spending 2% [of what they receive in diesel tax credits],” Pocock told Senate estimates on Tuesday. “That sounds like a joke to most Australians.”
Minister Tim Ayres defended the safeguard scheme, noting it had cut emissions by 5.5 million tonnes since reforms. One official argued it didn’t “make a lot of sense” to compare the two figures - presumably because it makes the policy look ridiculous.
Pocock wasn’t buying it: “We have a government telling us they’re very ambitious … then we have leaked documents from BHP who internally they are laughing at the safeguard mechanism and don’t have to worry about it for 14 years.”
Environment Minister Chris Bowen said he’d made his expectations “crystal clear,” but admitted the safeguard provided “some flexibility.” Resources Minister Madeleine King said she wasn’t concerned - BHP was just “doing their job.”
Independent MP Kate Chaney called for tightening the safeguard and reforming the diesel fuel tax credit scheme, which gives some industry a full rebate on 52.6 cents per litre of diesel. “Large resource companies like BHP produce a huge chunk of Australia’s emissions,” she said. “Without strong decarbonisation … Australia will not be able to meet its emissions targets.” She added that the current setup means “we have our foot on the brake and accelerator at the same time.”
Labor’s grassroots environment action network (Lean) wants the rebate capped at $50 million for the biggest miners, freeing up funds for electrification. Over 270 local ALP branches have passed motions supporting the push, which heads to Labor’s national conference in July. Bowen, however, downplayed immediate changes: “We just had a budget a couple of weeks ago - we decided not to make that change.”
BHP, for its part, says it’s cutting emissions by 36% from 2020 levels, targeting 30% by 2030 and net zero by 2050. It blames slowed progress on a lack of battery-electric trucks - though competitor Fortescue says the tech is ready and has ordered hundreds. BHP presumably will get there eventually, just in time for the next ice age.