The World Gold Council today launched its ‘Gold and climate change: The energy transition’ report, which looks at gold mining’s energy transition and climate impacts over the next decade. This should provide investors and industry stakeholders with greater clarity around gold’s greenhouse gas emissions profile and its potential pathway to net-zero, in line with Paris Agreement targets.
This report builds on the World Gold Council’s initial work of 2018 (Gold and Climate Change: An Introduction) and 2019 (Gold and Climate Change: Current and Future Impacts).
In this new analysis, produced in collaboration with energy and mining specialists at Wood Mackenzie, the World Gold Council has examined in more detail the opportunities for gold mining to decarbonise its power sources, which might allow the sector to reduce its emissions at a scale and speed sufficient to achieve climate targets. Recognising that action is needed over the next decade if net zero carbon targets are to be feasible, the report evaluates the impacts of reducing gold mining’s power emissions by 2030 to assess what would be required to be consistent with the Paris-aligned target of ‘well below 2 ºC’.
Key findings of the report include:
- Based on the current status and known plans of the gold mining industry, the emissions intensity of power used in gold production is estimated to fall by 35% by 2030. This fall is based on the growing decarbonisation of grid-sourced electricity, and plans of gold mining companies to replace direct site-generated electricity from fossil fuels with grid connectivity and the increased use of renewable energy sources, alongside substantially reduced production from high emission mines.
- If current plans to transition to lower carbon power sources become commonplace across the sector over the next decade, we estimate these changes could potentially reduce gold mining power emissions by at least a further 9% by 2030. This, combined with the above changes, should place a 1.5ºC target within reach.
- Accelerating and expanding these actions will make achievement of Paris-aligned climate targets feasible. For example, the combined replacement of 20% of the power supply from both grid and direct fossil fuel sources with renewables should support industry alignment with the 1.5ºC target.
- The continued improvement in the economics and practicality of renewables, alongside enhanced energy and operational efficiency, and associated technological advancements, will support the sector’s ongoing transition.
- Local and national factors will continue to play an important role, not least given the policy environment that governs the use of certain power sources in different jurisdictions.
Randy Smallwood, Chair of the World Gold Council and CEO and President at Wheaton Precious Metals, commented: “While climate change is a global challenge, it is also an opportunity for the gold mining sector to reduce its greenhouse gas emissions by transitioning to renewable energy sources, which isn’t just good for the environment, it’s also good for all stakeholders. We still have a long way to go, but as an industry we are proud of the progress we have made over the last few years and the continued efforts to transition our energy sources. This new report not only shows what we as an industry have accomplished, but also highlights the improvements the industry is striving to make over the next decade and looking even further ahead at 2050 in trying to achieve the Paris climate targets.”
John Mulligan, Director, Climate Change at the World Gold Council, commented: “All industries need to be able to demonstrate their ability to reduce emissions in line with the Paris Agreement and science-based targets, and this report offers substantial evidence that gold mining is in a strong position to do so. Building on the progress already made, the sector has the opportunity to substantially decarbonise the process of producing gold. Our findings suggest that a widening range of options for emissions reduction are available to gold mining companies, allowing them expand on the leadership already shown by those in the industry at the forefront of the energy transition.”
The full report is available for download here.