Green is Good: Playing to win in a multi-trillion-dollar green-tech game

The COP26 Glasgow Climate Summit has made it clear that the Australian Government will largely rely on private and listed companies adopting new green technologies to hit net-zero by 2050.
Green is Good: Playing to win in a multi-trillion-dollar green-tech game

The COP26 Glasgow Climate Summit has made it clear that the Australian Government will largely rely on private and listed companies adopting new green technologies to hit net-zero by 2050.

Nowhere will this be more apparent than in Australia’s booming resources sector, and in perhaps no other sector is there so much investment upside. COP26 leaders flagged eye-watering multi-trillion-dollar investment figures that will become available in the race to net zero, in addition to the more than one third of worldwide institutional investment that now requires an ESG component.

Mid-to-large cap companies that are not on-board, or above-board, with the ‘greening’ of their operations through technology, will not only damage their reputations but miss out on an entire new generation of value-creation opportunities.

Green technology comes in all shapes and sizes, as do the multiple challenges posed by phasing out fossil fuels. Advancing Australia to net zero will require a mix of technological advances, infrastructure upgrades and strong governance.

For the companies participating in Australia’s biggest mining conference, the International Mining and Resources Conference (IMARC) in 2022, early adoption of green technology is essential to creating value.

Net Zero: The next big thing?

With about 200 nations signing on, the consensus of the Glasgow pact was clear – there is much for companies to gain by acting now, and everything to lose by sitting on their hands.

A ‘wall of new private sector money’ will be available to those companies that embrace green technology and clean up their operations.

This multi-trillion-dollar wall of new money does not include the soaring price of battery metals, and Australia’s position as one of the biggest beneficiaries of the uptake green-tech.

According to the Resources and Energy Quarterly September 2021, Australia is the world’s largest exporter of lithium, the second largest producer of copper, and produces more than one-quarter of the world’s nickel.

Schneider Electric President of Mining Minerals and Metals, Rob Moffit, said that solar and wind generation were being rapidly adopted, but battery storage technology needs to improve so that uptake can continue to grow.

As you generate more power, you need to find better and more efficient ways to store that power. In line with that, there is going to be further investments into battery technologies, particularly the composition of batteries,” said Moffit.

“Demand for artificial intelligence (AI) is also set to rise. As we combine multiple energy sources, it starts to become a complex system that needs to be managed. AI and machine learning are the best technologies to do this.”

Kirkland Lake Gold’s Senior Vice President, John Landmark, echoed the sentiments of Moffit and insisted that truly renewable, reliable infrastructure was vital to the transition.

“Power utility companies are the biggest hurdle to greening our industry. Resource companies can only do so much in reducing their footprint, but clean and affordable energy is the biggest hurdle which lies outside of the hands of the resources company that needs to be cleaner,” said Landmark.

“Having a ‘token’ windmill or solar panel looks great in a photo-op but doesn’t address the sustainable operation and use of such renewable energy.”

‘Greenwashing’: The elephant in the room

There is perhaps no greater threat to the ESG-bona fides of a mining and resources company than ‘greenwashing’.

Greenwashing is the practice of misleading the media or the general public, or of taking advantage of a lack of awareness of what constitutes a legitimately ‘green’ or ‘clean’ technology, fuel or practice.

And it is firmly under the scrutiny of the public eye. Most recently, the High Court of Australia refused to hear Volkswagens’ appeal against its $125 million ‘Dieselgate’ fine – the largest penalty ever imposed on a company for misleading consumers – for deliberately deceiving regulators and customers about the environmental performance of its cars.

Landmark said that greenwashing was a particularly problematic issue because a company that damages its own reputation often leads to other companies within an industry being tarnished with the same brush.

He said there is also a tendency in industry to satisfy public demand and ESG agency requirements, rather than focus on legitimate sustainable practices, Which fosters an environment where resource companies feel like they need to address these tick boxes, leaving companies to dilute their sustainability efforts on non-material issues or embellish on them,” said Landmark.

By Kirkland Lake Gold sticking to facts only and not elaborating extensively on our sustainability achievements, we aim to ensure our credibility is linked to true data.”

Moffit emphasised this notion, saying that it was vital for companies to avoid the greenwashing trap.

“[It] can be achieved by having the right processes in place specifically using scientifically based, externally audited, transparent and consistent protocols,” said Moffit.

“It is vital that all commitments are certified by science and must cover all emissions scope categories, not only the ones directly related to the company’s operations.”

Electricity or hydrogen?

EV and hydrogen-powered vehicles are often seen as competing technologies. However, mining operations are complicated beasts and due to the size, location and technique – open pit or underground – of the operation, certain technologies will be better suited than others.

Landmark said that having many viable options available was the best way to ensure greater uptake of new vehicle technologies and therefore a greener economy, but pointed out that it is, “crucial that both electric and hydrogen vehicles are powered by a green grid,” Landmark said.

Moffit said that the most significant benefit of hydrogen technology in heavy industry and transportation is hydrogen’s superior energy density.

Electric and hydrogen are complementary vehicle technologies. Electrification is perfectly suited towards passenger vehicles, but it currently isn’t the ideal option for heavy-duty vehicles such as haul trucks due to the energy density of a battery, which is just 1%,” said Moffit.

“This means that for a 40-tonne truck, just over four tonnes of lithium-ion battery cells are needed for a range of 800 kilometres. This is not viable.”

John Landmark and Rob Moffit will be sharing further insights on green technology at the upcoming International Mining and Resources Conference (IMARC) in Melbourne on January 31 to February 2 2022.