The challenge

Decarbonisation modelling and business casing

The client engaged Rennie to develop a scope 1 and 2 decarbonisation roadmap for their Australian assets, with an accompanying framework for prioritising initiatives, decarbonisation model, and business case to meet their Safeguard Mechanism regulatory requirements and public decarbonisation commitments.

The client then engaged Rennie to progress the decarbonisation roadmap to advance specific prioritised decarbonisation initiatives from FEL0 to FEL1, to enter FEL2 gating. Additionally, a funding sources scan was undertaken to identify potential funding and grants sources available to the client to support business casing and initiative implementation.

Our solution

Engaging with stakeholders to identify the plan

Rennie worked together with a large number of stakeholders across each segment of the value chain to identify and further refine decarbonisation initiatives, and collate model inputs. We then built a dynamic decarbonisation model incorporating qualitative and qualitative inputs to develop a prioritisation framework, which formed the basis for the business cases presented to leadership. It included significant stakeholder engagement, and consideration of internal and external head-winds.

Once the roadmap and business case was complete, Rennie engaged with stakeholders across the business’ value chain (sustainability, finance and approvals) to collate updated model inputs and information for the decarbonisation model, scope business case requirements and develop workplans for business case progression for a selection of prioritised initiatives.

Our impact

Robust prioritisation informed by wide-ranging stakeholder engagement is key to navigating a complex regulatory environment in the hard-to-abate sector.

The model and roadmap helped to showcase both the opportunities and potential financial and operating returns of emissions-reducing projects, but also the ‘cost of doing nothing’ in a way that could resonate with different stakeholder groups across the business. The significant engagement with a wide range of business units, from the global COO to government relations and approvals, to asset managers, meant that the non-quantitative trade-offs of different decisions and investments between value chain segments could be properly considered.

The detailed initiative conceptualisation with site-based technical owners also uncovered opportunities to improve the efficiency of existing assets with cost-effective actions with fast payback periods. This is important in the context of a hard-to-abate sector, where deep decarbonisation of the alumina refining process and aluminium smelting is yet to be commercially proven.

The greatest value came from having a whole-of-business view on the scale of the challenge ahead, a tool to support decision-making as assumptions evolve, and the roadmap of prioritised initiatives to include in capital planning.

Key insights

• Qualitative factors around impact to social license and impact on approvals are important to ensure the whole organisation moves forward together, recognising the different decarbonisation needs of each part of the value chain (e.g. mining vs refining vs smelting).
• Understanding the ‘cost of doing nothing’ is a powerful tool in bringing stakeholders forward with a shared interest.
• Being able to test different external and internal assumptions as scenarios in a dynamic model allows for different risk appetites through scenario analysis to be tested (e.g. assumptions around the cost of carbon, mining volumes, timing of decarbonisation initiatives).