Investors welcomed Boral emission honesty, Vik Bansal says

Boral earlier this year said it would have to weaken its 2025 emission reduction targets, but chief executive Vik Bansal said investors welcomed the company’s honesty.

Boral boss Vik Bansal says investors thanked the company for its honesty. Picture: supplied

Investors welcomed Boral’s honesty about its difficulty in immediately reducing emissions, chief executive Vik Bansal said, as he urged other companies to be open about what is realistic and attainable.

Australia is struggling to meet ambitious targets to rapidly reshape its $2 trillion economy and wean it off its dependency of fossil fuels in a bid to meet net zero emissions by 2050 - which climate scientists say is vital to mitigating climate change.

The targets have widespread support, which has intensified pressure on Australian companies - many of which have promised to drive substantial reductions in emissions.

Mr Bansal said companies are committed to the change but the challenge is significant and Boral was forced to temper its immediate ambition. Boral in August announced that it now intends to curtail Scope 1 and 2 emissions by between 12 per cent to 14 per cent - lower than its previous target of 18 per cent.

“They all said, ‘thank you and at least we know what you are working through and there is no issue with greenwashing’ so we have to lean into this and be honest and put the real targets on the table,” said Mr Bansal.

Boral did not change its ultimate target of hitting net zero by 2050.

The process of making concrete, particularly in clinker production, is one of the most carbon-intensive industries and it comes as demand from an infrastructure boom means many of his plants are already running at full capacity.

The onus on Boral is intensifying as Labor’s centrepiece emission reduction scheme comes into force. Under the Safeguard Mechanism, Australia’s 215 largest emitters must cut emissions each year,

Boral is one of those covered, but Mr Bansal said the policy hinders the competitiveness of the company and a so-called carbon border adjustment mechanism must be introduced to compensate.

Boral - like other heavy manufacturers - face tough decarbonisation targets that will not be easily met without costly technological breakthroughs or purchase of carbon offsets, which are set to rise in price.

Dr Kerry Schott speaks during a discussion forum at the Clean Energy summit. Picture: AAP Image/Peter Rae

Federal energy minister Chris Bowen has said Labor is considering a carbon border adjustment mechanism, which penalises importers from countries that do not have carbon constraints, ensuring domestic firms are on a level playing field.

Australian interest in the scheme comes as the European Union moves to introduce a similar scheme by 2026, and industry bodies such as the Australian Industry Group and the Minerals Council of Australia have thrown their support behind the model.

Mr Bansal said he was confident that such a scheme would be implemented but said it was unclear when.

While the scheme is expected to be productive in driving down emissions, former chair of the Energy Security Board and current board member of AGL Energy Kerry Schott said Australia’s transition aspirations would be better served with a price on carbon.

Ms Schott said a price on carbon would achieve a more thorough transition away from fossil fuels, but conceded it was unlikely at least in the short term.

“It is so poisonous that no one will touch it but you have to have one to be able to coordinate everything,” said Ms Schott.

“It will come but at the moment you can work it out. There are these stealthy little mechanisms but it is a bit silly.”

Originally published as Investors welcomed Boral emission honesty, Vik Bansal says