Anglo-Australian mining giant BHP early this month signed a memorandum of understanding (MoU) with its customer Baowu, China's largest steel producer, marking a big step in the global cooperation to tackle the greenhouse emissions.
BHP will spend $35 million on emissions reductions projects at steel mills of Baowu. The five-year partnership will focus on carbon capture, utilization and storage, and initiatives of hydrogen injection.
This is the second partnership of its kind Baowu has inked with a large iron ore miner, after it agreed in 2019 to work with Rio Tinto on cutting carbon emissions.
The partnership came as a part of a total investment of $400 million used for dealing with the climate change, known as Climate Investment Program. The program is aiming to reduce Scope 1,2 and 3 emissions. The collaboration with Baowu is the first step in BHP's push to reduce the emissions of its customers, or Scope 3 emissions.
Steel mills are responsible for nearly 10% of the world's greenhouse gas emissions. In China, BHP estimated, over 90% of mills are adopting "integrated" steelmaking process, the most polluting type using a blast furnace to make iron first with ingredients of iron ore and coking coal, two of BHP's biggest earners.
The exploration for a reliable way to reduce greenhouse emission is a demonstration for China to reach its carbon neutrality target by 2060.
During the cooperation, the two giants will also work with the technology of hydrogen injection into the blast furnace, which is deemed as a potential long-term, low-carbon substitute for coking coal in steelmaking.
However, BHP suggested blast furnace iron making, where coking coal is the essential raw material, is unlikely to be displaced by emergent technologies this half century.
In October 2019, China Baowu, meanwhile, announced the establishment of a Low Carbon Metallurgy Innovation Centre and plans to establish a Global Low Carbon Metallurgy Innovation Alliance.
Baowu's leader Chen Derong said the MoU with BHP will further enhance and broaden the existing strategic partnership between the companies, and establish a model of joint industrial efforts to promote technological innovation and a sustainable transition to a lower carbon world.
(Writing by Alex Guo Editing by Tammy Yang)
For any questions, please contact us by firstname.lastname@example.org or +86-351-7219322.