The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the announcement that the Tomago aluminium smelter will switch to predominantly renewable energy by 2029.

Tomago is contracted to source its electricity from AGL’s Bayswater coal-fired power station until 2028. AGL intends to operate Bayswater until 2036.

Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:

“Tomago’s announcement is the final nail in the coffin for the Bayswater coal-fired power station. Without its largest customer, AGL is unlikely to make a profit from Bayswater beyond 2029.

“AGL should bring forward the Bayswater closure date immediately and endorse ACCR’s shareholder resolution which calls for Paris-aligned targets.

“The owners of Tomago - Rio Tinto, CSR and AMP - should be applauded for this outcome. Such decisions de-risk Australian industry in the face of carbon border adjustment mechanisms.

“Climate change deniers have long claimed that renewables can’t do the job in heavy industry - this announcement will put an end to such myths.

“AGL was warned about the transition risks from its coal-fired power stations, but it has steadfastly refused to listen, plan and invest sufficiently. AGL needs to take proactive action in the interests of its shareholders.

“AGL now has the perfect opportunity to set Paris-aligned targets before its proposed demerger goes to a vote.

“Setting a clear closure date will allow workers and the community time to adjust and transition. AGL must ensure workers are repositioned or retrained throughout the closure.

“The NSW government has proven that with the right policy settings in place, the energy transition can be accelerated. Businesses should get on board and commit to ambitious emissions reduction targets as Tomago has done.”

Background

ACCR has filed a shareholder resolution with AGL Energy, calling for Paris-aligned targets. The text of the resolution and supporting statement can be found here.

ACCR filed a shareholder resolution to AGL Energy in 2020, calling for the early closure of its Bayswater and Loy Yang A coal-fired power stations, which was supported by >20% of shareholders, including the world’s largest asset manager, Blackrock.

AGL Energy - Electricity output by primary energy source

*All coal
**All renewables
Source: https://www.2020datacentre.agl.com.au/environment, 2021 Half Year Results

AGL Energy - Operational greenhouse gas footprint (material sites and fuels)

Source: https://www.2020datacentre.agl.com.au/environment

At least two of Australia’s largest aluminium customers, being the United States and Japan, are considering carbon border adjustment mechanisms.