In this article, we bust a few myths about the commercial viability of decarbonisation and identify the barriers that still exist.
Myth busting
Despite a marked change in mindsets in recent times, there are still a lot of people who don’t realise that tailored decarbonisation strategies bring significant commercial benefits.
Cost
One common misconception is that decarbonisation initiatives are prohibitively expensive.
While initial investments in low-carbon technologies can be substantial, it is likely the long-term financial benefits will offset these costs.
Energy efficiency measures, renewable energy sources and advanced mining technologies reduce dependence on fossil fuels. This can lead to significant savings on energy bills and help avoid future costs associated with carbon pricing and regulatory penalties.
With the cost of energy becoming oppressive for all sorts of industries, these savings can have a critical impact on a business’ profit margins.
There are also financial mechanisms and incentives, such as grants, tax benefits, and carbon credit systems, designed to relieve the financial burden of these investments.
Xenith works with clients to identify grants and other incentives available to mitigate that upfront expense.
Efficiency
Critics often argue that low-carbon technologies are less efficient than traditional methods.
However, advancements in technology are rapidly closing this gap. For instance, replacing diesel vehicles with electric vehicles (EVs) in mining operations leads to lower emissions, lower operating costs, energy security and improved health and safety.
Energy storage solutions such as large-scale Battery systems (BESS) are improving, making renewable energy more reliable, and more capable of supporting consistent, efficient industrial operations.
Feasibility
The feasibility of decarbonisation is sometimes questioned, specifically the sheer scale of changes required in industries like mining.
However, phased approaches and strategic integration of green technologies are proving successful.
For example, First Quantum Minerals Ltd. is powering its Zambian copper mines, Kansanshi and Sentinel, with a substantial $500 million solar and wind energy project. This initiative involves constructing a 230 MW solar plant and a 200 MW wind farm.
Sector-specific challenges like high energy consumption and remote locations are being addressed through innovations such as micro-grids and localised renewable energy production.
These technologies aren’t just feasible – they’re often highly advantageous.
Barriers
While existing decarbonisation technologies are already improving the bottom line for many in the mining industry, there is more work to be done before we will see universal adoption.
Economic
Inconsistent financial incentives and fluctuating policy landscapes can complicate long-term planning and investment decisions.
Technological
While technology to support decarbonisation is advancing, there are still significant gaps in its availability, scalability, and integration.
Some of the latest renewable energy technologies are not yet at a scale or efficiency levels to meet the heavy demands of large industrial operations or are not fully adaptable to all geographical locations.
Additionally, there are challenges in the storage and grid integration of renewable energy, critical for ensuring stable and reliable supply in high-demand sectors like mining.
Cultural
Cultural resistance to change is a significant hurdle. This includes organisational barriers, where traditional practices are deeply ingrained, and the workforce may lack the skills or desire to shift to new technologies or processes.
Case study
A high carbon intense facility owned by a multinational industrial and resources company recently worked with Xenith to lodge a grant application to the Powering the Regions Fund (PRF) for a decarbonisation project. Xenith assisted the facility in identifying the most applicable decarbonisation project with the aim of the project being funded up to 50 per cent by the Federal Government.
The grant application was completed by our multi-disciplinary specialist team comprising ESG, environment, mining, energy and business analysts.
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