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Energy and Climate Change

Energy use and efficiency initiatives, climate change-related risks, carbon pricing and greenhouse gas emissions, climate policies and regulations.

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Energy and Climate Change

Organizations around the world are collaborating to take action against climate change. Implementing the Paris Agreement — which commits governments around the world to keep global temperature rise well below 2°C — requires firm commitment, concrete actions and joint mobilization of all stakeholders in public and economic life. In response to the Paris Agreement as well as the United Nations Sustainable Development Goal 13 on climate action, a number of major mining jurisdictions made climate change commitments and are reporting on their progress towards implementing them.6

Teck recognizes the need to take action on climate change and we are committed to reducing greenhouse gas (GHG) emissions by improving energy efficiency and implementing low-carbon technologies, as well as advocating for climate change policies that facilitate the transition to a low-carbon economy. The copper and steelmaking coal produced at our operations are among the lowest carbon intensity products in the world compared to our peers, and we are building on that track record in how we approach our oil sands developments. In 2018, our Fort Hills oil sands mining and processing operation, a long-life, high-quality asset located in the Athabasca region of Alberta, achieved full production with an oil sands product that has a lower carbon intensity than approximately half the oil currently refined in the U.S. 

In early 2018, we released a Climate Action and Portfolio Resilience report that outlines Teck’s Strategy for Climate Action, goals and performance; assesses key climate-related risks and opportunities for our businesses; and considers the potential implications for Teck of two commonly used climate change-related scenarios. This report aligns with recommendations from the Task Force Climate-related Financial Disclosure, which we support.

6Energy Efficiency: Aggregate Performance. Mining Association of Canada.

Teck’s Approach to Energy and Climate Change

Teck’s Board of Directors provides oversight on all strategic matters, including the risks and opportunities related to climate change. The Board has established the Safety and Sustainability Committee (SSC), chaired by a member of the Board. Through the SSC, the Board reviews and monitors environmental performance and includes consideration of climate-related issues in corporate-level strategies and capital investment decisions. The SSC meets and reports to the company’s Board of Directors quarterly.

The HSEC Risk Management Committee, chaired by our CEO, consists of corporate officers and senior managers who establish priorities and direction for environmental programs, and who monitor results. During both SSC and HSEC Risk Management Committee meetings, specific issues related to energy and climate change management may be raised as individual items.

Climate-related risks and opportunities are identified using risk management tools internal to Teck, and rely on both internal and external expertise on climate change. These risks and opportunities are then prioritized based on their likelihood and severity of impacting our business, and are considered in our overall strategic planning.

The following senior leaders are involved in implementing the management of energy and GHG emissions:

  • The Senior Vice President, Sustainability and External Affairs reports directly to our CEO and is responsible for sustainability, health and safety, environment and community affairs, including energy and GHG emissions

  • The Vice President, Environment oversees compliance with environmental standards for projects, operations and our legacy properties, and regularly reviews environmental performance risks and strategic issues

  • The Vice President, Community and Government Relations is involved in engaging provincial and federal governments on climate policy

  • The Manager of Sustainability & Climate Change coordinates the risk and opportunity management for climate-related risks and the implementation of our climate action strategy and energy and GHG reduction goals

Compensation

Teck’s bonus compensation structure is based on objectives outlined through three components: corporate, business unit and personal. Across the three components, objectives related to sustainability performance (HSEC topics) affect approximately 10%–20% of the bonus as a whole. The business unit component for operations has three metrics: production (33.3%), cost (33.3%) and sustainability (33.3%) of the specific operation.

Particular members of Teck’s management team are also incentivized to manage sustainability-related issues, which can include climate and energy, primarily through the personal component of the bonus plan. In addition, all members of our senior management team have at least 5% of their annual total target bonus based on sustainability performance.

Our commitment to efficient energy and climate change management is outlined in Our Strategy for Climate Action and our Climate Action and Portfolio Resilience report, which includes scenario analysis. Our Code of Sustainable Conduct describes our commitment to promote the efficient use of energy and material resources in all aspects of our business, and outlines our support of sustainable development and willingness to accept our obligation to constantly improve our methods of extracting the world’s resources to the benefit of our stakeholders. Our HSEC Management Standards stipulate that all of Teck’s major capital projects will include the identification and evaluation of opportunities for improving energy efficiency. 

We work with various local, national and international organizations and programs to support climate action:

  • CDP: We annually report our global GHG emissions data to the CDP, an independent not-for-profit organization working to drive GHG emissions reduction by businesses and cities

  • GHG Protocol for Calculating Emissions: Our energy and carbon accounting practices follow these rigorous standards from the World Resources Institute and the World Business Council for Sustainable Development

  • The Paris Pledge for Action: Teck is a signatory to the Paris Pledge for Action in support of reducing emissions and achieving the objectives of the Paris Agreement

  • Carbon Pricing Leadership Coalition: A partnership of national and sub-national governments, businesses and organizations working toward integrating carbon pricing into the global economy

  • Council for Clean Capitalism: A group of forward-thinking companies working together to ensure sufficient financing and transparency to smooth our transition to a low-carbon economy

  • Canada’s Oil Sands Innovation Alliance (COSIA): An alliance of oil sands producers focused on accelerating improvement in environmental performance in Canada’s oil sands through collaborative action and innovation

  • Climate Solutions and Clean Growth Advisory Council: This council provides strategic advice to government on climate action and clean economic growth. Teck’s Senior Vice President, Sustainability and External Affairs is currently a council co-chair.

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 developing a cost- and carbon-competitive energy business, based in Alberta, Canada, which is home to some of the most progressive climate action policies of any oil-producing jurisdiction globally. One of these projects, Fort Hills, will have one of the lowest carbon intensities among North American oil sands producers.

Our approach to ensuring Teck remains competitive throughout the shift to a low-carbon economy also focuses on ensuring our operations remain efficient and low cost. This gives us increased ability to weather potential carbon-related costs and shifts in demand while remaining competitive. 

Carbon intensity is a measure of the GHG emissions generated during production of a given unit of a commodity, e.g., the amount of carbon dioxide (CO2) generated per tonne of copper or steelmaking coal produced. According to the ICMM, at 60 kilograms of CO2-equivalent per tonne of steelmaking coal produced, the emissions intensity of our steelmaking coal is less than half the industry average of more than 150 kilograms.

Similarly, our copper production averages 2.6 tonnes of CO2-equivalent per tonne of copper produced, which is 35% below the industry average of 4 tonnes. Moving forward, our goal is to continue to improve the carbon intensity of our operations and future projects.

Low-Carbon Energy

Each of Teck’s operations has an Energy Lead and when sites find opportunities to optimize energy use, these strategies are shared across sites to continuously work to lower our total energy consumption. 

Many of our operations access low-carbon sources of electricity. For example, for our B.C. operations, 92% of grid electricity is renewable and almost entirely generated from hydro. Trail Operations’ electricity, which accounts for 44% of our company’s total electricity consumption, is from the Waneta hydroelectric dam and transmission system. 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. At our Quebrada Blanca Operations in Chile, we are currently sourcing 30% of our total energy needs from solar power.

Teck is exploring additional opportunities for solar, wind and other low-carbon technologies across our portfolio. We are prioritizing these opportunities based on proximity to areas where we operate or have operated, and where we may be able to gain expertise in renewables, further exploration of specific technologies of interest to Teck and the ability of projects to provide other sustainability benefits such as for local communities.

 

Teck advocates for broad-based carbon pricing and we build carbon pricing into our business planning, capital planning and risk-decision processes. Currently, all of our steelmaking coal operations are covered by carbon pricing, as is half of our copper business and all of our metals refining business. Where a clear and certain carbon price is present, we incorporate that price into our planning as well as any known or planned changes to the carbon price.

We continue to advocate for carbon pricing policies that maintain the global competitiveness of trade-exposed industries to prevent carbon leakage, which is when GHG emissions move from one jurisdiction to another as a result of differences in carbon prices.

See our Climate Action and Portfolio Resilience report for more information on carbon pricing.

The Task Force on Climate-Related Financial Disclosures (TCFD) made recommendations in 2017 for how companies can improve climate-related public disclosure. Teck’s Climate Action and Portfolio Resilience report is structured to align with the TCFD’s recommendations.

Building on our existing climate-related work and disclosures, Teck has analyzed and disclosed the potential implications of various climate-related scenarios for our business, including a scenario that limits climate change to 2° Celsius above pre-industrial levels. The use of scenarios aids our decision-making and strategic planning. We will build on our report in future years to continue to clearly communicate Teck’s approach to climate action and our potential climate-related risks and opportunities.

 

We are taking steps to guard against the future impacts of climate change. The physical risks of climate change to our activities can include rising sea levels, rising temperatures and changes in precipitation. They can result in the increased intensity and duration of extreme weather events such as storms, drought and flooding. Consequently, we integrate climate variables (e.g., precipitation, temperature, water runoff) into our project designs and ongoing mine planning processes — including closure and reclamation planning.

We work with technical experts in the field of climate modelling and forecasting to better understand potential changes in climate-related conditions in the regions where we operate. This helps us to assess how climate change modelling can be integrated into our decision-making and risk management practices. We typically take climate change into consideration in project development, mine planning and closure planning.

Our sustainability strategy outlines our goals in relation to energy and climate change at our operations.

By 2020, we will:

  • Implement projects that reduce energy consumption by 2,500 terajoules (TJ)

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

  • Assess opportunities and identify potential project partners toward achieving our 2030 alternative energy goals

  • Engage with governments to advocate for effective and efficient carbon pricing 

By 2030, we will:

  • Implement projects that reduce energy consumption by 6,000 TJ 

  • Implement projects that reduce GHG emissions by 450 kt of CO2-equivalent 

  • Commit to 100 megawatts (MW) of alternative energy generation

Table 1: Energy and Climate Change Audits

Type

Organization

Items Audited

External

Mining Association of Canada: Towards Sustainable Mining audit

  • Energy use and GHG emissions management systems

  • Energy use and GHG emissions reporting systems

  • Energy use and GHG emissions performance targets

External

International Council on Mining and Metals: Sustainability Report assurance

  • GHG emissions — direct scope 1

  • GHG emissions — indirect scope 2

  • GHG emissions — indirect scope 3 (use of sold products)

  • Principle 6: Pursue continual improvement in environmental performance issues, such as water stewardship, energy use and climate change

External

GHG Regulation Assurance

Validation of GHG data reported and quantification of methodologies

External

ISO 14001 external audits

Components of the environmental management system at each site

Internal

ISO 14001 internal audits

Components of the environmental management system at each site

Internal

Risk-based Health, Safety and Environment audits at each site

Adherence to regulatory and permit requirements; effectiveness of controls based on risk profile

Following each of these audits, applicable management teams use the results to inform future actions and Teck’s five-year planning process. 

Our Performance in Energy and Climate Change in 2018

Positioning Teck to Thrive in the Low-Carbon Economy

Energy Use and Reduction

In 2018, we consumed a total of 43,722 TJ of energy (i.e., electricity and fuels), as compared to 43,899 TJ in 2017, as shown in Figure 12. In 2018, five of our operations reduced their absolute energy consumption from 2017. 

Collectively, projects implemented in 2018 have reduced annual energy consumption at our operations by 68 TJ — enough to power 631 homes for a year. Since 2011, our efforts have resulted in reduction projects totalling 2,220 TJ of savings.

Figure 12: Energy Consumption by Type

In 2018, approximately 27% of our energy requirements (i.e., electricity and fuels) were supplied by non-carbon-emitting sources, primarily hydroelectricity, compared to 27% in 2017. Of our total electricity consumption in 2018, 81%, or 11,754 TJ, was from renewable energy sources, the majority of which is hydroelectricity.

In Figures 13 to 15, we outline our energy intensity, or the amount of energy used per tonne of product. 

Figure 13: Steelmaking Coal Production Intensity

Figure 14: Zinc and Lead Production Intensity

Figure 15: Copper Production Intensity

Energy and carbon intensity for the production of steelmaking coal increased in 2018 (Figure 13). This change is attributed to longer haul distances as well as our Coal Mountain Operations transitioning to approaching closure. According to data from the International Council of Mining and Metals (ICMM), at 67 kilograms of CO2-equivalent per tonne of steelmaking coal produced, the emissions intensity of our steelmaking coal is less than half the industry average of more than 150 kilograms. Similarly, our copper production averages 2.6 tonnes of CO2-equivalent per tonne of copper produced, which is 35% below the industry average of 4 tonnes. Our goal is to continue to improve the carbon intensity of our operations and future projects. 

Investing in Alternative Energy

Teck is exploring opportunities for solar, wind and other low-carbon technologies. We are prioritizing these opportunities based on proximity to areas where we operate or have operated, opportunities where we may be able to gain expertise in renewables, opportunities to further explore specific technologies of interest to Teck, and the ability of projects to provide other sustainability benefits, such as for local communities. 

Investing in our Energy Business Unit

As the International Energy Agency (IEA) has articulated in looking at all future energy use scenarios, oil and gas will continue to be an important part of the world’s energy mix for the foreseeable future, even in the transition to a low-carbon economy. Our focus is on helping to meet that need and on developing Canada’s oil sands resources in the most sustainable way possible for people, for communities and for the environment.

We have a strong track record of taking steps to improve energy efficiency, reduce GHGs and lower the carbon intensity of our products. Both our steelmaking coal and copper production are among the lowest carbon intensity in the world, and we are building on that track record in how we approach our oil sands development. Bitumen from our Fort Hills oil sands mining and processing operation has a lower carbon intensity than about half of the oil currently refined in the United States, and it has one of the lowest carbon intensities among Canadian oil sands producers. 

Reducing Our Carbon Footprint8

Throughout our business units, operations and project planning stages, a full spectrum of environmental risks are assessed, including those associated with energy use and GHG emissions. As shown in Figure 16, Scope 1 (direct) GHG emissions are those that occur from energy sources that are owned or controlled by the company. Scope 2 (indirect) GHG emissions are those that occur from the generation of purchased electricity consumed by the company, and physically occur at the facility where electricity is generated.

Figure 16: Scope 1 and Scope 2 GHG Emissions by Fuel Type(1),(2)

In 2018, our total GHG emissions (Scope 1 and Scope 2), as CO2e, were 2,939 kilotonnes (kt), compared to 3,010 kt in 2017. Of those totals, our direct (Scope 1) GHG emissions were 2,597 kt in 2018, compared to 2,682 kt in 2017. We estimate our indirect (Scope 2) GHG emissions associated with electricity use for 2018 to be 341 kt, or approximately 12% 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.

Scope 3 emissions are other emissions that arise from sources owned or controlled by other entities within our value chain, such as those arising from business travel by employees, the use of our products, and the transportation of materials that we purchase and sell. Our most material Scope 3 emissions are from the use of our steelmaking coal product by our customers. 

Table 14: Total Emissions (kilotonnes CO2e)(1)

  2018 2017 2016 2015
Total Emissions — Direct (Scope 1) 2,598 2,682 2,552 2,551
Total Emissions — Indirect (Scope 2) 341 328 379 373
Total Emissions (Scope 1 + Scope 2) 2,939 3,010 2,931 2,934
Total Emissions — Scope 3 76,000 78,438 79,053 76,000
(1) Teck’s quantification methodology for our Scope 1 and Scope 2 emissions is aligned with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard

 
Carbon Pricing and Advocating for Climate Action

We believe that broad-based pricing of carbon is one of the most effective ways to incentivize real reductions in GHG emissions by ensuring that all emitters contribute to the solution. In 2018, we continued to advocate for carbon pricing policies that maintain the global competitiveness of trade-exposed industries to prevent carbon leakage, which is when GHG emissions move from one jurisdiction to another as a result of differences in carbon prices. Currently, all of our steelmaking coal operations are covered by carbon pricing, as is half of our copper business, our Fort Hills oil sands mine and all of our metals refining business. 

We continue to see a trend among governments to pursue climate change policies. The most significant action has taken place in Canada, where the majority of our operations are located, and Canada has some of the highest carbon prices in the world.9 In 2018, the Province of B.C. increased the carbon tax by $5 per tonne of CO2-equivalent (CO2e) from $30 to $35. This price is expected to increase by $5 per tonne of CO2e per year until reaching $50 per tonne of CO2e. The B.C. Government also made a commitment to address impacts on emissions-intensive, trade-exposed industries to ensure that B.C. operations maintain their competitiveness and to minimize carbon leakage. In 2018, the Province of Alberta transitioned to the Carbon Competitiveness Incentive Regulation, the industry-specific carbon pricing policy set to replace the previous Specified Gas Emitters Regulation, which concluded in 2017. We will continue to assess the potential implications of the updated policies on our operations and projects. 

Adapting to Physical Impacts

We are taking steps to guard against the future impacts of climate change, as we recognize that ongoing changes to climate could pose a potential physical risk to our mining operations and to related infrastructure. 

In 2018, we hosted a workshop with Acclimatise on physical climate risks and opportunities, and new methods of climate adaptation planning. The workshop gathered people from across Teck to discuss the steps involved in assessing physical climate risks and opportunities for our operations, supporting infrastructure, local communities and environments, and broader stakeholders. Participants also began to identify climate risk management (adaptation) actions, and explored how a changing climate interfaces with existing Teck processes, standards, practices and guidelines.

8 In 2016, we updated the Global Warming Potential values for all of our GHG accounting to align with regulatory requirements; therefore, historical values have been restated. 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.
9 Mapped: The countries with the highest carbon price. Carbon Brief.

Outlook for Energy and Climate Change

In 2019, Teck will continue to incorporate planning regarding climate change risks into our business strategy and decision-making. We will also continue to track and refine indicators that influence the strength and resilience of our assets in a low-carbon world, such as the electric vehicle market, growth in renewables, and global carbon prices. As in previous years, we will advance the four pillars of our Strategy for Climate Action — reducing our carbon footprint, positioning Teck for the low-carbon economy, advocating for climate action and adapting to the physical impacts — and work to achieve our 2020 goals for Energy and Climate Change within our sustainability strategy. 

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