PanCanadian Framework on GHG Offsets A presentation by Rio Tinto

Transcription

1 PanCanadian Framework on GHG Offsets A presentation by Rio Tinto CCME Webinar April 25, 2017 Kemano River, British Columbia

2 2 Outline Overview of Rio Tinto An Offset Framework - Key Success Factors Other elements to consider Conclusion

3 3 Rio Tinto An Overview Global Resource Extraction Company Exploration, Mining, Power Generation and Metal Smelting Copper, Iron Ore, Coal, Bauxite, Aluminum Smelting Global operations, including Canada for more than 110 years Aluminum smelting combined with hydroelectricity production in Quebec and BC Other Canadian operations in Alberta, Newfoundland and NWT GHG Emissions of 6.7 Mt CO2e in 2015 Mainly process emissions from the reduction process in Aluminum smelting Strong and long commitment to climate action Since 1980, several actions taken by Rio Tinto Deployment of low-ghg emission technologies and best practices Last example in BC, with a CA $6 B investment, starting in 2016 Since 1997, subscribed to several voluntary reduction programs Operations in regions where carbon pricing mechanisms are most mature Canada (BC, Alberta, Quebec) and Europe Critical topic for our Canadian operations, particularly aluminum Perfect example of Emission-Intensive Trade Exposed industry

4 4 Key success factors for Offsets Program A broad definition for eligibility Any program leading to verified reduction of GHG emissions occurring in Canada including industrial modernization projects or deployment of proven technologies only when not covered by a target-based incentive with some key features to ensure a true PanCanadian approach Quantification Need for rigorous and consistent approach across projects and across Canada Protocols Use of the current basis in the different provinces, with federal guidelines Start Date Consideration of the recent significant investments Alignment Rules defined at the provincial level, following federal orientation and principles Strong support for the concept paper A good foundation for a PanCanadian Offsets Program Recognition by the various Carbon Pricing Mechanisms Optimization of compliance costs

5 5 Other things to consider in an Offsets Framework Risk of investment leakage Program should start at national level to ensure investment remains in Canada With consideration for international offsets in the future Potential of fraud of fake programs Clear and consistent rules, with strict verification programs Use of internationally recognized ISO standards Third-party verification as a key principle Alignment with GHG emissions reduction efforts Low limit in compliance options to drive innovation and emission reductions Important for target-based schemes 8% like in Quebec as a good level

6 6 Conclusion Offset projects are a good way to tackle climate action Combination of incentives for projects and compliance cost management A broad definition of Offsets is required Programs specifics to be determined With appropriate balance between federal guidelines and provincial specificity A national market will reinforce an interest in offsets Avoids externalization of Canadian investments by keeping it national Provides a solution for compliance obligations for Canadian players

7 Contact Information: Frederic Huguet Director Climate Change ( ) Carolyn Chisholm Principal Advisor External Affairs Carolyn.Chisholm@riotinto.com (613) Richard Prokopanko Consultant P. Richards Inc. Richardp@prichardsinc.com (604) April 25, 2017 Kemano River, British Columbia

8 Background Slides

9 Rio Tinto Statement about Climate Change Rio Tinto recognises that climate change is occurring and is largely caused by human activities. There is a need for large reductions in global greenhouse gas emissions to reduce the extent of future climate change and avoid the most severe of the risks We support a coordinated global approach to reduce emissions. Until that is in place, as well as after, we recognise that it will be necessary for individual jurisdictions to take actions. Such actions should contribute to efficient and equitable emissions reductions across jurisdictions and sectors, minimising distortions to international economic activity. We continue to support market mechanisms as the best way of achieving emissions reductions at least cost.

10 10 Rio Tinto Principles for GHG Management Basic Principles (for emission reduction and offsets): Coordinated global approach & ensure a level playing field Stable regulatory framework so businesses can plan their investments Use of market mechanisms to achieve emission reductions Explicit support for a market-based price on carbon Policies Considerations: Competitiveness concerns within and across jurisdictions Transparency and predictability Maximum flexibility through the use of trading and other mechanisms Revenues raised from carbon pricing used to facilitate innovation Broad-based and cover a wide range of sectors and emitting activities

11 11 A good example of GHG-reducing investment Production capacity will increase by 48% (420,000 tons) Old technology As a result of Rio Tinto s AP Technology, we have been able to reduce: - Energy consumption by 33% per ton of aluminum produced - Overall emissions by nearly 50% - GHG emissions intensity by 50%, making Kitimat one of the lowest GHG emissions in aluminum production worldwide New technology The workforce of the modernized smelter will be comprised of about 1,000 people

12 The modernized Kitimat smelter 12