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Energy and Climate Change

Energy (fuel and electricity consumption and costs, energy intensity, energy-efficiency initiatives), climate risks and emissions (greenhouse gas emissions and other gas emissions)

GRI Indicators and Topic Boundary
302-103, 302-1, 302-3, 302-4, 305-103, 305-1, 305-2, 305-3, 305-4, 305-5, 305-7

Why Was Energy and Climate Change a Material Topic in 2015?

Climate change is an increasingly important global challenge for businesses and communities, and is addressed in the United Nations Sustainable Development Goal 13 on climate action. In a carbon-constrained world, energy production and consumption needs to change in order to reduce greenhouse gas (GHG) emissions and transition to a lower-carbon economy. This will likely require significant change in the way we produce and consume energy.

2016 was another significant year for global action on climate change, with countries from around the world ratifying the Paris Agreement. Businesses are increasingly taking a role in climate action and advocating for fair and broad-based climate-related regulation, including carbon pricing

As society transitions to a lower-carbon economy, the transition will present risks and opportunities for the mining industry. Demand for commodities is likely to shift in response to a lower-carbon environment, and certain commodities may be more significantly affected than others. In response to the Paris Agreement and United Nations SDG 13, a number of major mining jurisdictions announced new climate change commitments; for example, in 2016, the Government of Canada announced its intention to establish a national framework on climate change that will include a national carbon price.

As mining operations require large amounts of energy to produce and transport their products, energy is one of their most material costs. As large energy consumers, mines also produce significant GHG emissions, which exposes them to potential new costs, both as a carbon price is introduced, and additional costs when the price increases.

We recognize that our activities consume energy and generate significant GHG emissions. This is why Teck has set ambitious targets to reduce our carbon footprint and advocate for policies that support the world’s transition to a lower-carbon economy.

At the same time, we know that the metals and minerals we produce are essential to building the technologies and infrastructure necessary to reduce GHGs and adapt to the effects of climate change. For example, renewable energy systems can require up to 12 times more copper, compared to traditional energy systems; steel. and the steelmaking coal required to make it, is necessary for infrastructure that reduces emissions, such as rapid transit and wind turbines. Continued responsible production of these metal and mineral products is essential to the global effort to combat human-caused climate change.

Our strategy to contribute to global climate action, adapt to a lower-carbon economy and continue to responsibly produce the materials essential for society is built around four pillars: reducing our carbon footprint, positioning Teck for the lower-carbon economy, advocating for climate action, and adapting to the physical impacts of climate change. This strategy is outlined in the section below and in our Climate Action Strategy, available at www.teck.com/climateaction

Performance Highlights

Implemented energy reduction projects resulting in 1,550 terajoules of energy reductions since our baseline year of 2011
Implemented projects that have reduced greenhouse gas emissions by approximately 217 kilotonnes to the end of 2016
 

 

Our Stories

  • Supporting SDG 13: Harnessing Solar Power at Quebrada Blanca Operations
  • Behind the Pilot: LNG Truck Conversion at Fording River Operations
  • Revving Up Engine Life
  • Improving Haul Truck Efficiency at Elkview Operations
  • Participating in Global Action on Climate Change
  • Reducing Energy Consumption with Bright Ideas
  • Cutting costs and emissions with LNG truck pilot
  • SunMine Begins Operation in Kimberley, B.C.
  • SunMine Solar Farm Project at the Sullivan Site
  • ZincNyx Renewable Battery Development
  • Investing in Wind Energy
  • Cardinal River Operations Receives TSM Leadership Award
  • Supporting Alternative Energy Education near Quebrada Blanca Operations
  • Construction starts on SunMine, Western Canada’s largest solar development
  • Partnering with Thompson Rivers University to Improve Data Collection on Energy Use
  • Building Our Energy Business Unit through the Responsible Development of Canada’s Oil Sands
  • Improving Haul Truck Productivity
  • Community Celebrates Grand Opening of Wind Power Project
  • Energy and Mining: An Uphill Battle
  • Energy Management – Improving Dryer Fan Efficiency at Coal Mountain Operations
  • Reducing Greenhouse Gas Emissions at Our Steelmaking Coal Operations
  • Improving Energy Efficiency at Highland Valley Copper
  • Our Targets and Commitments

    Implement projects that reduce energy consumption by 2,500 TJ by 2020. 

    Implement projects that reduce GHG emissions by 275 kilotonnes (kt) of CO2-equivalent by 2020. 

    Assess opportunities and identify potential project partners toward achieving our 2030 alternative energy goal by 2020. 

    Engage with governments to advocate for effective and efficient carbon pricing by 2020. 

    Implement projects that reduce energy consumption by 6,000 TJ by 2030. 

    Implement projects that reduce GHG emissions by 450 kilotonnes (kt) of CO2-equivalent by 2030. 

    Commit to 100 megawatts (MW) of alternative energy generation by 2030. 

     

    How Does Teck Manage Energy and Climate Change?

    In this section, we outline our strategy to contribute to global climate action and continue to responsibly produce the materials essential for society. We also outline our use of low-carbon energy, generation of alternative energy, and response to carbon pricing and regulation.   

    We are taking action to minimize our contribution to global GHG emissions and to support broader efforts to combat climate change. We have set ambitious targets to reduce GHG emissions and to improve energy efficiency at our operations, and we are making significant progress towards achieving them. 

    The key sources for direct GHG emissions vary significantly by operation. For example, at our steelmaking coal operations, emissions are primarily associated with the drying of coal as well as our mobile equipment and the methane gas released from coal seams during mining. Emissions from Trail Operations are dominated by the use of coal in the furnaces and the use of natural gas to produce steam for heating process solutions. At Red Dog Operations, the diesel used to produce electricity and the fuel for mobile equipment are the key source of GHG emissions. The primary source at Highland Valley Copper Operations, which receives electricity from the hydroelectric grid, is the use of diesel for our mobile equipment. As such, the options for reducing emissions vary significantly across our different operations. Since 2011, Teck has reduced GHG emissions by over 217,000 tonnes, which is a 7% reduction in our overall GHG emissions. We are focused on driving our emissions even lower and have set ambitious targets to further cut emissions and improve energy efficiency at our operations. Our target is to reduce our emissions by 450,000 tonnes by 2030, which would be the equivalent of taking over 95,000 cars off the road annually.

    As a result of our work to date, Teck is now one of the lowest GHG emission-intensity miners in the world. According to data from the International Council of Mining and Metals (ICMM), our steelmaking coal and copper production rank among the lowest for carbon intensity, compared to the global mining industry. Carbon intensity is a measure of the GHG emissions generated during production of a given unit of a commodity — e.g., the amount of CO2 generated per tonne of copper or steelmaking coal produced. At 60 kilograms of CO2 per tonne, our steelmaking coal is less than half the industry average of over 150 kilograms of CO2 per tonne. Our copper production averages 2.6 tonnes of CO2 per tonne of copper, which is 35% below the industry average of 4 tonnes.

    Table 55: Primary Uses of Energy at Our Operations

    Fuel Type

    Primary Uses

    Electricity

    • Powers processing at our metal mines (e.g., milling) and the smelter facility at Trail Operations

    Coke, petroleum coke, natural gas and coal

    • Provides the primary process and combustion fuels at Trail Operations

    Natural gas and coal

    • Used primarily for drying our coal product

    Diesel

    • Fuels haul trucks to move material

    Natural Gas

    • Fuel in liquefied natural gas (LNG) form for haul trucks to move material


    Low-Carbon Energy
    In addition to projects we have implemented to reduce our energy consumption and GHG emissions, many of our operations access low-carbon sources of electricity. In B.C., where seven of our operations are located, 92% of grid electricity is clean and renewable energy, and is almost entirely generated from hydro. Our Trail Operations, also located in B.C., includes one of the largest fully integrated zinc and lead smelting and refining complexes in the world, and is our largest consumer of electricity, accounting for 44% of our company’s total electricity consumption. The electricity consumed at Trail Operations is provided by the Waneta hydroelectric dam and transmission system, in which Teck holds a two-thirds interest. This enables Trail Operations to produce refined zinc and lead at a lower GHG intensity compared to producers powered by fossil fuel-based electricity grids. In some of the other jurisdictions where we operate — such as Alberta and Chile — the electricity grids are more heavily based on fossil fuels. Recognizing this, one of our sustainability goals is to commit to 100 megawatts of alternative energy generation by 2030. 

    Alternative Energy Generation 
    Teck is also investing in research and building alternative power generation technology. We are partners in a community solar farm in Kimberly, B.C., and are assessing other opportunities to build and source alternative power generation for our other sites. 

    From 2011 until 2017, we were partners in a large-scale wind power facility in Alberta called Wintering Hills. Our investment in Wintering Hills helped us advance our sustainability goal of developing or sourcing non-carbon emitting electrical energy. It also provided an opportunity to develop our understanding of wind power generation and evaluate other opportunities to develop wind projects around our operations to further support our sustainability goals. 

    In February 2017, Teck sold its 49% interest in Wintering Hills to IKEA Canada. Moving forward, we will continue to examine opportunities to enhance our renewable energy portfolio. 

     

    Our approach to ensuring Teck remains competitive throughout the shift to a low-carbon economy is focused on ensuring our operations remain efficient and low cost, and having a diversified mix of products to enable us to respond to changing demand.

    As the world transitions to a lower-carbon economy, there will naturally be shifts in demand for certain commodities; demand for those required for low-carbon technologies may increase, while others may decrease. At Teck, our diversified mix of products all have a role to play in the low-carbon economy of the future. This puts us in a strong position to adapt to meet changing market demand.

    The minerals and metals we produce — including steelmaking coal, copper and zinc — are some of the basic building blocks of low-carbon technology and infrastructure.

    We are focused on continuing to reduce costs to ensure our mines remain efficient and low-cost. This gives us increased ability to weather potential carbon-related costs and shifts in demand, while remaining competitive. In some cases, cost reduction is also supporting carbon reduction at Teck. Measures to improve the efficiency of our operations often also lead to further reductions in the carbon intensity of our mining activities. 

    Carbon Pricing and Regulation
    At Teck, carbon pricing is integrated at multiple levels of decision-making, ranging from annual operating budgets developed at the site level to corporate decision-making for large capital investments. We incorporate a carbon price into our capital and risk decision processes where material, and we calculate and consider our carbon exposure in terms of absolute costs incurred on an annual basis and projected out to at least 2020. Where a clear and certain carbon price is present, we incorporate that price and any known and/or planned changes to the carbon price. Where uncertainty exists, we may conduct sensitivity analyses to better understand what our exposure and risks are under different carbon pricing and regulatory scenarios.

    Over the past decade, carbon regulations have emerged across the globe. We recognize that current and future regulations may affect our business by placing direct costs on our operations and increase the costs of production. We already incur carbon costs in Canada as a result of provincial regulations in B.C. and Alberta. Our expectation is that this trend will continue, with new regulations being implemented and carbon costs increasing over time. 
     
    The Province of B.C. introduced a carbon tax on fossil fuels in 2008. The tax is imposed on various fossil fuels used in B.C. For 2016, our seven B.C.-based operations incurred $48 million in provincial carbon tax, primarily from our use of coal, diesel fuel and natural gas. Our Cardinal River Operations meets Alberta GHG compliance requirements through efficiency improvements and the use of offsets previously generated from the Wintering Hills Wind Power Facility. 

    As of January 1, 2017, the ceiling price for compliance under Alberta’s Specified Gas Emitters Regulation increased to $30/tonne of CO2e. As such, Teck has integrated these levies into forecast cost estimates and future planning to meet these tax increases.

    Forecasting using a variety of scenarios demonstrates an exposure in 2020 ranging from $30 million to $60 million for our B.C. operations. In Alberta, based on scenarios that include reduction requirements ranging from 12% to 40%, and carbon costs ranging from $15 to $40 per tonne of CO2e emissions, we estimated that our compliance costs could be $0.5 million to $4.5 million per year for our Cardinal River Operations. Assessing the same scenarios for our Fort Hills and Frontier projects, compliance costs could range from $10 million to $75 million per year if and when both of these projects start operations. 

    We are taking steps to guard against the future impacts of climate change. Our primary focus is on taking action now to limit climate change by reducing emissions and advocating for climate action strategies; however, we recognize that ongoing changes to climate could pose a potential physical risk to our mining operations and to related infrastructure such as transportation systems. 

    These risks could be in the form of increased temperatures, changes in precipitation, changes in levels of fresh water, or increases in extreme events such as droughts, floods or storms. 

    In response, we are incorporating a range of climate parameters into our project designs and ongoing mine planning processes — including closure and reclamation planning — to minimize our vulnerability to climate variability and to ensure robustness.

    In 2010, we began working with technical experts in the field of climate modelling and forecasting for the purpose of better understanding potential changes in climate-related conditions at some of our sites in British Columbia. This project has helped us to assess how climate change modelling could be integrated into our decision-making and risk management practices. We typically take into consideration climate modelling in project development, mine planning and closure planning, and have done so for many years. For example, trends in permafrost advance and retreat, precipitation patterns, tidal variations and storm intensity impacts on operations and transportation are all evaluated using climate analysis and modelling.

    We believe that all sectors of the economy must play a role in tackling the challenge of climate change. That is why Teck supports implementation of low-carbon technologies and advocates for measures that support society’s transition to a lower-carbon economy. 

    Teck is a signatory of the 2015 Paris Pledge, in support of the Paris Agreement on Climate Change. The Paris Agreement provides a global framework for action on climate change and targets to hold the increase in the global average temperature to well below 2°C above pre-industrial levels. 

    We are also actively advocating for policies that reduce emissions, including broad implementation of carbon pricing. 

    By applying a carbon price for all emitters, all sectors of the economy are incentivized to play their part in solving a challenge to which we are all contributors. Carbon policies must be implemented in a manner that is reasonably consistent between jurisdictions so that the risk of creating a competitive disadvantage for some emitters does not induce carbon leakage: the transfer of production and associated emissions to countries with limited or no GHG regulations. This approach is critical to the long-term success of emissions reductions. We believe broad-based pricing of carbon is the most effective way to incentivize emission reductions while also ensuring that all emitters and jurisdictions are contributing to the solution. Further, it will level the playing field for companies like Teck who have already adapted existing carbon pricing into their business, as outlined in the Carbon Pricing and Regulation section.

    As part of this advocacy, Teck was the first Canadian resource company to join the Carbon Pricing Leadership Coalition, a partnership of national and sub-national governments, businesses and organizations working toward integrating carbon pricing into the global economy. We are also a member of the Council for Clean Capitalism.

     

    What was Our Performance in Energy and Climate Change in 2016?

    In this section, we report on our energy use and reduction, energy intensity, alternative energy generation and GHG emissions, including Scope 1, Scope 2 and Scope 3. 

    Energy Use and Reduction

    In 2016, we consumed a total of 42,538 TJ of energy (i.e., electricity and fuels), as compared to 42,521 TJ in 2015. Trends in fuel (diesel, gasoline, coal, natural gas, coke, petroleum coke and other fuels) and electricity consumption for the past three years are shown in Figure 23. In 2016, four of our operations reduced their absolute energy consumption from 2015. 

    In 2016, approximately 28% of our energy requirements (i.e., electricity and fuels) were supplied by non-carbon-emitting sources, primarily hydroelectricity. Of our total electricity consumption in 2016, 80%, or 11,760 TJ, was from renewable energy sources, the majority of which is hydroelectricity. 

    Collectively, projects implemented in 2016 have reduced annual energy consumption at our operations by 97 gigawatt hours (350 TJ) — enough power for 3,250 homes for a year. This represents a 1% decrease of our total annual energy consumption. Since 2011, our efforts have resulted in reduction projects totalling 1,550 TJ.

    Figure 23: Energy Consumption by Type 2013–2016(1) 

     

    Roll Up (TJ)

    2013

    2014

    2015

    2016

    Diesel

             17,253

           17,256

          15,861

          15,141

    Gasoline

                   228

               221

               266

              264

    Coal

                2,612

            2,792

            2,489

           3,420

    Natural Gas

                7,527

            7,251

            7,206

           7,744

    Coke & Petroleum Coke

                1,513

            1,379

            1,296

              455

    Other

                2,265

            2,126

            1,606

              862

    Electricity

              14,158

           14,037

          13,796

          14,651

    Total

              45,556

           45,062

          42,521

          42,538

    (1) Other includes propane, waste oil, fuel oils and other process fuels.

    Energy Intensity
    In Figures 24 to 26, we outline our energy intensity, or the amount of energy used per tonne of product, which is a measure of efficiency that helps us to better manage our performance. The variability found in the data for these figures falls within the normal parameters of mining operations.  

    Energy and carbon intensity for the production of steelmaking coal continued to decrease (improve) in 2016 (Figure 24). This change is due to lower strip ratios, a continued focus on productivity improvements in mining, maintenance and processing operations, as well as the increased use of natural gas to displace coal in the product dewatering process.

    Figure 24: Energy and Carbon Intensity for Steelmaking Coal Production 2016–2013

    Type

    2016

    2015

    2014

    2013

    Energy Intensity

    0.65

    0.69

    0.70

    0.73

    Carbon Intensity

    0.060

    0.062

    0.065

    0.066

    Figure 25: Energy and Carbon Intensity for Zinc and Lead Production 2016–2013

    Type

    2016

    2015

    2014

    2013

    Energy Intensity

    12.05

    11.95

    12.06

    13.41

    Carbon Intensity

    0.53

    0.52

    0.54

    0.61

    Figure 26: Energy and Carbon Intensity for Copper Production 2016–2013

    Type

    2016

    2015

    2014

    2013

    Energy Intensity

    43.72

    41.20

    46.65

    45.91

    Carbon Intensity

    2.63

    2.54

    2.82

    2.93


    Alternative Energy Generation 
    Our 49% share of power generation from Wintering Hills in 2016 was 138 GWh, enough power to provide 89,000 tonnes of CO2-equivalent credits. 

    Greenhouse Gas Emissions
    In 2016, our total GHG emissions (Scope 1 and Scope 2), as CO2e, were 2,925 kilotonnes (kt), compared to 2,908 kt in 2015. Of those totals, our direct (Scope 1) GHG emissions( ) were 2,552 kt in 2016, compared to 2,551 kt in 2015. Figure 27 shows a breakdown of our emissions by fuel type. We estimate our indirect (Scope 2) GHG emissions associated with electricity use for 2016 to be 374 kt, or approximately 13% of our total emissions. These emissions are associated primarily with our Cardinal River, Carmen de Andacollo and Quebrada Blanca operations, as their electricity power grids are based heavily on fossil fuels. Elsewhere, our indirect emissions were relatively small, as operations in B.C. and Washington state obtain a significant proportion of their electricity from hydroelectric generation.

    Reducing Greenhouse Gas Emissions
    We implemented several energy and GHG reduction projects that contributed to our energy goals in 2016. We also identified reduction projects that were successful at a number of our sites, and worked to implement them at our other operations. In 2016, five of our operations reduced their GHG emissions.

    We are working towards our 2020 GHG reduction target of 275 kt of CO2e emissions, with reductions estimated at approximately 217 kt of CO2e emissions at the end of 2016. 

    Figure 27: Scope 1 and Scope 2 GHG Emissions by Fuel Type(1),(2)

    GHG Emissions by Fuel Type

    Roll Up (kt CO2e)

    2016

    2015

    2014

    2013

    Diesel

            1,095

                1,147

            1,248

            1,230

    Gasoline

                 18

                     18

                 15

                 15

    Coal

               324

                   234

               272

               252

    Natural Gas

               389

                   362

               365

               379

    Coke and Petroleum Coke

                 50

                   118

               135

               148

    Other

                 97

                   147

               180

               203

    Fugitive Emissions

               578

                   525

               579

               568

    Electricity

               374

                   357

               343

               367

    Total

            2,925

                2,908

            3,135

            3,162

    In 2016, we updated the Global Warming Potential values for all of our GHG accounting to align with regulatory requirements. Global Warming Potentials are the factors that convert greenhouse gases – like methane (CH4) – to a carbon dioxide equivalent (CO2e), thereby standardizing the quantification of GHG emissions. As a result, historical values have been restated to ensure consistency of accounting practices. Fugitive emissions from our coal operations (i.e., estimated methane release) are captured as direct emissions.
    (1) Scope 1 (Direct) Greenhouse Gas Emissions: Emissions that occur from energy sources that are owned or controlled by the company. 
    (2) Scope 2 (Indirect) Greenhouse Gas Emissions: Emissions that occur from the generation of purchased electricity consumed by the company. Scope 2 emissions physically occur at the facility where electricity is generated. 

    Scope 3 Emissions 
    While Scope 1 emissions occur from energy sources controlled by the company and Scope 2 emissions occur from electricity consumed by the company, Scope 3 emissions are other emissions that arise from sources owned or controlled by other entities within our value chain. For example, Scope 3 emissions include those arising from business travel by employees, the use of our products, and the transportation of materials that we purchase and sell. Consequently, Scope 3 emissions cover a wide spectrum. Our approach is to identify and quantify those that are material to Teck.

    Our most material Scope 3 emissions are from the use of our steelmaking coal product by our customers. Unlike the vast majority of coal, which is burned to generate electricity, steelmaking coal has special properties that make it a suitable input for manufacturing steel. Based on our 2016 sales volumes, Scope 3 emissions from the use of our steelmaking coal are approximately 79,053 kt of CO2e, compared to 76,000 kt of CO2e in 2015 and 74,000 kt of CO2e in 2014.

    Emerging Risk Transition to Low-Carbon Economy

    Achieving the COP21 goal of limiting climate change to 2° Celsius or less will likely result in new regulations, policies and changing consumption patterns that could either negatively or positively affect demand for various mining commodities as they come into effect. 

     

    Sustainability Spotlight

    In 2016, as part of our 2020 goal to engage with governments to advocate for effective and efficient carbon pricing, we met with the British Columbia, Alberta, and Canadian governments and became the first Canadian resource sector company to join the Carbon Pricing Leadership Coalition.

    View our full goals progress report on Our Sustainability Strategy page.

    Outlook for Energy and Climate Change

    Energy will continue to be one of the most significant costs in our business. As such, we will continue to focus on improving our efficiency and reducing our greenhouse gas emissions. In 2017, we will continue to advocate for broad-based, effective carbon pricing, reduce our emissions and support the development of alternative energy technologies: efforts that support United Nations Sustainable Development Goal 13, to take urgent action to combat climate change and its impacts. We will continue to evaluate opportunities for alternative energy at our operations, major projects and legacy properties. 

    Teck Logo

    Teck is a diversified resource company committed to responsible mining and mineral development with business units focused on copper, zinc, steelmaking coal and energy.