South Africa's biggest coal producer, Thungela Resources, says planned mine closures and the commissioning of a renewable project are some of the keys to tackling the group's Scope 1 and Scope 2 greenhouse gas emissions.
“It is important that we demonstrate credibility by actually investing in things we said we would,” CEO July Ndlovu told the group's annual meeting this week.
“For instance, the renewable project we said we would be investing in by the end of this year. We will be commissioning it by the end of this year, in terms of tackling Scope 1 and Scope 2 emissions.”
Ndlovu said Thungela had adopted a “scenario-based” view to understand the right timing to commit to the reduction of Scope 3 emissions.
Scope 1 emissions refer to direct greenhouse gas emissions from fossil fuels, including diesel and petrol, and combustion in mobile mining equipment; Scope 2 refers to emissions from Eskom-purchased electricity; while Scope 3 emissions result from activities from assets not owned by Thungela.
“We recognised that some of the Scope 3 [emissions are] going to be related to mine closures, where we will not be replacing those tonnages.”
He said they did not want to set targets they would be unable to meet. “That is being very deliberate and rigorous in our thought process, both in terms of timing and quantum of what we can impact.”
The coal miner was grilled by climate justice group Just Share on its climate change commitments.
Emma Schuster, a senior climate risk analyst at Just Share, told the Thungela board that though the miner had improved its Scope 3 reporting, it still had not set Scope 3 reduction targets for 2050 — the date at which most countries have committed to net zero emissions — despite these constituting 98% of Thungela's emissions.
“The science-based target initiative requires companies to set at least one near-term science-based target when Scope 3 emissions make up 40% or more of its total emissions in order to have a credible climate strategy. So, until Thungela has set Scope 3 targets, it does not have a credible emissions reduction strategy aligned with science or global best practices. What is Thungela's envisaged time frame in which it will set Scope 3 targets aligned with the Paris goals and a strategy to achieve these targets?” she asked.
This company digs up and makes the coal. The people who cause environmental issues are those who buy the coal and burn it, like China, Russia, and Indonesia. Whoever buys and burns the coal should be asked why they burn so much coal, but people need electricity and I understand that
— Thungela shareholder, speaking on condition of anonymity
In its 2023 climate change report released in April, Thungela said it was committed to a 30% reduction of its Scope 1 and 2 emissions by 2030 from a 2021 emissions baseline and in line with its path to net zero by 2050.
The group is expected to bring on stream a 4MW renewable energy plant at its Zibulo colliery before the end of 2024.
A Thungela shareholder who spoke on condition of anonymity said it was unfair to expect the coal miner to take flak for emissions.
“This company digs up and makes the coal. The people who cause environmental issues are those who buy the coal and burn it, like China, Russia, and Indonesia. Whoever buys and burns the coal should be asked why they burn so much coal, but people need electricity and I understand that.”
According to the International Energy Association, despite coal being the biggest contributor to climate change, it continues to supply over a third of global electricity generation. The association said that while most countries were gradually replacing coal for power generation, the fuel was still important for iron and steel making until new technologies are found.
Schuster said while Thungela had looked to carbon capture, utilisation and storage (CCUS) technology to champion its decarbonisation strategy, none of the projects had yielded positive results after decades of experiments worldwide.
“The reality is that commercial CCUS projects running today still only capture about 0.1% of fossil fuel emissions globally. What is Thungela's expected capex investment for CCUS technology, and in what time frame, and how does this compare to capex allocated to other elements of your decarbonisation?”
Ndlovu said Thungela's pathway to net zero would be subject to market needs and those of the countries in which it operates.
“Just like renewable technologies, if you go back 50 years ago, solar panels were not economical. They had to be subsidised to come down to commercial scale. Equally, CCUS is one of those technologies that will require continued investments and support among other technologies such as highly efficient low-emission technologies.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.