Rio Tinto now plans to spend only $1 billion to $2 billion on decarbonisation over the next nine years. This is a sharp reduction from the previously announced $7.5 billion. The company insists that its climate targets remain on track. However, environmental groups are raising doubts about whether outsourcing the work to third parties will lead to meaningful emissions reductions.
Australian mining companies are currently trying to balance their climate pledges with financial constraints. Both Rio and BHP have switched strategies. BHP has reduced its climate budget from $4 billion to $500 million. Instead of investing directly in renewable infrastructure, both companies are now engaging external providers to build energy projects such as wind and solar farms. Rio says that the electricity needed for its operations should help generate up to $13.6 billion in private-sector investment in renewables.
So far, Rio has arranged for over 2.7 gigawatts of renewable energy, made up of solar, wind and battery assets, to supply its industrial operations, including those in Gladstone. Despite this progress, watchdogs remain critical. They argue that both companies are avoiding direct responsibility. Detractors claim that current high profits could have supported greater investment in hard-to-decarbonise areas such as low-emission metal processing and clean industrial transport.
The implications go beyond just these two companies. Federal figures show that 143 large industrial sites exceeded pollution thresholds last year. More than a dozen of these sites are owned by Rio or BHP. All had to buy carbon offsets as a result. Although Rio plans to limit its use of offsets to 3.57 million tonnes annually by 2030, cutting back on its internal budget may lead to more dependence on outsourced solutions and carbon credits. Meanwhile, Fortescue is targeting “real zero” emissions by 2030 without relying on offsets.
These developments also highlight potential flaws in national climate policy. Critics argue that the Albanese government’s safeguard mechanism, designed to limit industrial emissions, is not pushing major polluters to use earnings for serious climate investment. As mining companies seek to meet environmental targets on paper, the decline in internally financed green efforts could delay the rollout of key technologies and weaken Australia's credibility as a climate leader.
