Former BHP economist urges tougher government policies to push miners to decarbonise

Former BHP chief economist Huw McKay is arguing that Australia will need tougher government policy if it wants heavy industry to decarbonise at the pace climate targets require.

McKay, now a visiting fellow at the Australian National University’s Crawford School of Public Policy, says voluntary corporate pledges are not enough to force the difficult investment decisions that mining companies face.

His intervention comes after earlier Guardian reporting in May on leaked BHP documents that showed delayed renewable-energy projects, slower electrification planning and a broader slowdown in the miner’s decarbonisation push.

The latest Guardian interview, published on July 9, puts those internal delays at the centre of a wider policy argument: if companies continue to move slowly on their own, governments will have to do more of the work.

Policy pressure, not pledges

McKay’s argument is that the economics of decarbonisation will not change fast enough if miners are left to rely on their own commitments.

He is calling for stronger government pressure, with carbon pricing part of the policy discussion reported by the Guardian. The point is not simply to reward firms that already plan to cut emissions, but to change the incentives that shape capital spending.

That matters because mining is one of the hardest sectors to transform quickly. Large operations depend on diesel-heavy fleets, major power systems and other equipment that is expensive and technically difficult to replace at scale.

BHP has publicly committed to reducing operational emissions and reaching net zero by 2050. But the company has also said its harder-to-abate assets require new technology, especially for diesel replacement and power systems.

That tension is central to McKay’s criticism. He is saying the transition is too slow to be left to corporate goodwill, while BHP has argued that technology readiness and operational constraints limit the pace of change.

What the leaked BHP documents showed

The policy debate is being shaped by the leaked-document reporting that first exposed how far BHP’s internal timelines had drifted.

Guardian reporting on May 25 said internal BHP documents showed delayed renewable-energy projects in the Pilbara and slower electrification planning for diesel truck and train fleets.

The same reporting said BHP had delayed or shelved major emissions-reduction projects, including a large renewable-energy system and a beneficiation plant.

It also said the company continued buying diesel trucks while pushing fleet electrification into the late 2030s or early 2040s in internal scenarios.

A separate Guardian interactive on the same day said an internal memo had effectively put the brakes on the miner’s climate push. Together, the reports suggested a widening gap between public climate language and internal planning.

McKay is using that gap as evidence for a broader policy point. If a company as large as BHP can slow its own timetable, his argument goes, then stronger government intervention becomes the mechanism that forces progress.

Why BHP matters

BHP is not just another company in the climate debate. It is one of the world’s biggest miners, and its operations are exactly the kind of heavy industrial footprint that makes emissions cuts difficult.

That makes the company a useful test case for Australia’s industrial decarbonisation strategy. If policy cannot shift behaviour at BHP, the question becomes how much change can realistically be achieved across the rest of the sector.

Mining is especially challenging because the sector relies on long-lived capital equipment, diesel-intensive assets and large power loads. Even when companies want to move faster, those constraints make rapid change expensive.

McKay is not denying those realities. His point is that the constraints are precisely why government policy has to be stronger.

Australia’s policy backdrop

The immediate federal backdrop is the safeguard mechanism, which remains the main industrial emissions policy for large sites.

The Guardian reported that Climate Minister Chris Bowen has rejected the idea of introducing a carbon tax, leaving the debate focused on whether the existing policy mix is strong enough to drive faster change.

That makes McKay’s intervention politically significant as well as industrially relevant. He is arguing that the market will not deliver quickly enough on its own and that policy needs to make emissions cuts harder to avoid.

The national target adds to the pressure. AP reported in 2025 that Australia is aiming for a 62% to 70% emissions cut by 2035, which helps explain why the pace of industrial decarbonisation remains under scrutiny.

What to watch next

The research packet points to several immediate questions.

One is whether BHP issues a fresh direct response to McKay’s comments or to the earlier leak reporting.

Another is whether McKay expands on his policy prescription at a scheduled ANU seminar, including whether he specifies a carbon price level or a more detailed reform package.

There is also the question of whether the government strengthens the safeguard mechanism or otherwise sharpens policy pressure on large industrial emitters.

For now, the story captures a familiar climate-policy fault line. Companies say the transition depends on technology and operational reality, while former insiders like McKay say that without tougher government policy, the pace of change will remain too slow.