Decarbonisation’s new frontier

Mineral carbonation and the future of carbon credits in Australian mining.

The Australian Government has committed to ambitious goals of a 62–70 per cent reduction in greenhouse gas emissions compared to 2005 levels by 2035, and net zero emissions (the difference between greenhouse gas released by human activities and verified removal of greenhouse gases from the atmosphere) by 2050.¹ This commitment sets a demanding trajectory for all sectors, including mining. As climate targets tighten under international agreements, investors increasingly require demonstrable emissions reductions aligned with these obligations. Although mining is often perceived as an emissions-intensive industry, it is uniquely positioned to contribute to climate mitigation through the adoption of innovative technologies.

Carbon dioxide removal technologies are emerging as essential complements to deep emissions cuts, especially for hard-to-abate sectors. Mineral carbonation, a natural process that converts carbon dioxide gas into stable solid carbonate minerals by reacting it with calcium- or magnesium-rich minerals, offers a scientifically robust, permanent storage solution. The challenge lies in accelerating this process, and establishing economic and regulatory frameworks to support it at scale.

The recent BHP Mount Keith Nickel West mine pilot project in Western Australia, in collaboration with Arca Climate, serves as a publicly available example of this potential. The project demonstrates that the site’s magnesium-rich tailings can be utilised to remove carbon from the air permanently. Advanced technologies can accelerate this natural process, highlighting its promising innovative approach within the industry. While specific proprietary technologies were employed to enhance this natural process, the focus here is on the innovative approach of leveraging mining waste as a valuable resource for climate action.

This is where the role of carbon credits becomes critical. In Australia, Australian Carbon Credit Units (ACCUs)² are essential instruments for businesses and investors seeking to reduce their carbon footprint and promote sustainable practices. ACCUs are tradeable financial instruments awarded by the Clean Energy Regulator to the operators of specific projects with a demonstrated capacity to remove carbon dioxide from the atmosphere. Approved projects are awarded ACCUs on the basis of the verified amount of carbon dioxide removed from the atmosphere and permanently stored, and these units can then be traded on a secondary market. It is through the sale of ACCUs that companies can generate revenue, which in turn de-risks and finances the deployment of novel climate solutions.

As of 14 January 2026, each credit was valued at $37.75.³ Businesses purchase credits to offset emissions, either voluntarily or under the Safeguard Mechanism.⁴ The Safeguard Mechanism is an Australian regulatory framework that sets emissions baselines for large industrial facilities and requires them to offset any excess emissions through compliance options such as purchasing credits. These purchases create the market for carbon credits.

A recent assessment of a mineral carbonation crediting methodology undertaken by the Clean Energy Regulator (CER) highlights a critical challenge in the carbon crediting landscape, using Mount Keith as a key example. While the potential of the carbon crediting method proposed by BHP (expression of interest 2024-25)⁵ was recognised, it ultimately fell short of meeting the requirements for crediting under the current Australian regulatory framework due to limitations within the crediting system. This situation stresses broader issues within the carbon credit policy landscape that need to be addressed moving forward. This isn’t a dismissal of the technology’s promise, but, rather, this outcome highlights an opportunity for Australia’s carbon accounting and crediting systems to adapt in line with emerging international standards – ensuring future compatibility and integrity.

Currently, the impounded tailings from mining operations are substantial, occupying vast areas and presenting significant environmental challenges. These visible remnants of mining activities highlight potential opportunity for our systems to catch up and fully integrate novel climate solutions. Doing so will better address the strategic landscape for future mining operations and enhance our ability to manage their environmental impacts effectively.

Why eligibility remains vague

So, why did BHP’s proposal hit a roadblock? The core reason the CER couldn’t approve carbon credits for this method is a fundamental gap in international accounting frameworks. The proposal, which aimed to credit atmospheric carbon dioxide removal via mineral carbonation, was deemed ineligible for carbon credits under existing frameworks. This highlights a hurdle for any cutting-edge technology seeking recognition within Australia’s carbon crediting system.

The core challenge originates from the international accounting framework set by the Intergovernmental Panel on Climate Change (IPCC). Currently, the IPCC has not established inventory guidelines that allow carbon dioxide removal technologies, such as mineral carbonation, to be formally included in national greenhouse gas inventories. Since Australia’s carbon crediting system requires any abatement to align with international obligations, the absence of these guidelines means atmospheric carbon dioxide removal cannot yet qualify under the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act).

This creates a structural barrier – until global standards evolve, the CER cannot approve such methods. Where can progress be made? Technical advancement and research can play a pivotal role in developing robust measurement, reporting and verification (MRV) systems for mineral carbonation. These innovations will ensure that once international frameworks recognise carbon dioxide removal, Australia is ready with scientifically rigorous methodologies to support eligibility and integrity in carbon accounting.

Timeline for future eligibility and evolving international standards

Despite the current ineligibility, the CER’s recommendation was not a flat-out rejection. Instead, they offered ‘support for development in future rounds following amendments’. This is a critical signal: achieving eligibility will require an evolution of Australia’s national carbon crediting framework aligned with emerging international standards. For mining strategic planners, this forward-looking perspective underlines the importance of preparing for systemic changes, rather than incremental tweaks.

Here’s where the international landscape becomes particularly relevant: the IPCC, through its Task Force on National Greenhouse Gas Inventories, is preparing its ‘Methodology Report on Carbon Dioxide Removal Technologies, Carbon Capture, Utilisation and Storage’. This report will review and consolidate existing methodologies for accounting and reporting carbon dioxide removal activities. A key scoping meeting for this initiative was held in October 2024, and the final report is expected to be released in early 2027. This timeline is significant, as it marks the earliest point at which mineral carbonation and other carbon dioxide removal (CDR) methods – technologies that remove carbon dioxide from the atmosphere and store it permanently – could potentially be recognised within national greenhouse gas inventories, subject to the development of robust measurement and verification protocols.

These timelines suggest any future legislative reforms to enable carbon dioxide removal crediting under the CFI Act will likely be contingent on the development of international accounting standards. Specifically, the IPCC’s forthcoming report expected in early 2027 is anticipated to provide the necessary framework for countries to include mineral carbonation in their national greenhouse gas inventories. As Australia’s crediting system aligns with international obligations, this timeline effectively sets a reference point for when domestic eligibility pathways might be reconsidered.

For stakeholders in the mining sector, this offers a strategic horizon for industry-wide planning and engagement. Industry bodies, research organisations, and policymakers may find value in closely monitoring these developments to ensure readiness for future regulatory shifts.

Technical barriers: measuring carbon in open systems

Beyond the legislative framework, the CER’s assessment also highlights specific technical challenges that mineral carbonation projects, especially those operating in open systems must overcome to gain future eligibility. These aren’t minor details; they are critical engineering and operational considerations for any mining company exploring this pathway.

The proposed method involves an ‘open system’, which, in this case, refers to a tailings storage facility where mineral carbonation occurs naturally over time. In such systems, the process of carbon dioxide mineralisation is influenced by environmental variables, such as rainfall, temperature fluctuations, and atmospheric carbon dioxide levels, which can affect reaction rates and outcomes. This variability makes it challenging to measure the volume of carbon dioxide permanently stored accurately and to determine the timeframe over which mineral carbonation occurs.

In contrast, many other carbon capture and storage methods operate in ‘closed systems’, in which carbon dioxide is captured from a point source (e.g., industrial emissions) and injected into sealed geological formations, such as depleted oil and gas reservoirs or saline aquifers. These controlled environments allow for more precise monitoring and verification of carbon dioxide storage. The open nature of the mineral carbonation process occurring on the top of the tailings dam introduces complexity in establishing robust MRV protocols.

Furthermore, the CER specifically noted that while the supporting document from Arca provided some details on abatement calculation, it ‘still lacks sufficient information to enable an assessment of the abatement estimation approach’. Their feedback was clear: a ‘worked example’ would have been useful to inform the assessment. This demonstrated a vital need for highly robust, transparent, and verifiable MRV systems for any future methodology – a significant area ripe for innovation in mineral carbonation.

Importantly, this landscape also presents an opportunity to highlight the potential value of research regarding the relation to the Western Australian Government’s investment through the Mineral Research Institute of Western Australia’s (MRIWA’s) Accelerated Mineral Carbonation Research program.⁶ This program serves as a key enabler, providing research and development support to address the technical challenges outlined and enhance the effectiveness of mineral carbonation projects. Investing in such initiatives could lead to breakthroughs in MRV systems, and ultimately support the broader goals of sustainability in the mining sector.

A critical strategic distinction for investment

The CER assessment also touched upon how this proposed method might apply to Safeguard facilities. The CER noted that ‘further work would be required to determine whether Safeguard facilities could undertake these types of projects’.⁷ Intriguingly, they suggested such facilities might be able to create credits under the Safeguard Mechanism, which, importantly, ‘are not required to meet the strict integrity requirements applied to ACCUs’.

This distinction carries significant weight for the mining industry’s investment strategies. While ACCUs are generally preferred for their higher certainty and value, they can also lead to lower development costs.⁸ Credits under the Safeguard Mechanism are primarily designed for internal compliance under the Safeguard Mechanism, allowing large emitters to reduce their net emissions below a baseline⁹; however, industry executives have voiced concerns about the inherent uncertainty of credits under the Safeguard Mechanism’s future value, making them less reliable for long-term project financing¹⁰.

The CER’s implicit guidance here suggests that while ACCU eligibility for carbon dioxide removal is pending, credits under the Safeguard Mechanism might offer an interim, albeit less certain, crediting pathway for some projects, directly influencing immediate investment decisions.

The path forward for the mining sector

The CER’s assessment of BHP’s proposal offers clarity for all proponents of mineral carbonation and CDR in Australia. It lays out the specific regulatory and technical requirements that must be met to unlock the potential of these technologies and integrate them into future mining strategies.

The CER request for ‘further work or supporting evidence’ and a ‘worked example’ is a direct challenge for continued investment in research and development. Programs such as the MRIWA’s Accelerated Mineral Carbonation Research Program and CSIRO’s CarbonLock Program¹¹ are positioned to contribute to refining MRV methodologies.

The industry has a unique opportunity to take an active role in shaping the future of carbon crediting. Proactive engagement with the Australian Government is essential as it considers amendments to the CFI Act and develops new crediting methods. A collaborative approach will ensure policy frameworks keep pace with technological innovation, creating clear and attractive pathways for carbon dioxide removal and, essentially, de-risking future investments.

Companies should carefully consider the implications of ACCU versus Safeguard Mechanism credits eligibility in their project design. While the long-term objective remains ACCU eligibility for atmospheric carbon dioxide removal, it may be worthwhile to explore credits under the Safeguard Mechanism as a possible interim or complementary approach in project development. Closely monitoring the IPCC’s progress on CDR inventory guidelines is paramount.

Australia’s ability to federally credit these projects is directly linked to these international developments, providing a global context for national strategies and ensuring future compatibility.

Forging a net zero path with mineral carbonation

The recent CER assessment of BHP’s mineral carbonation proposal for the Mount Keith project marks a pivotal moment for the Australian mining industry. This evaluation highlights potential pathways for future enhancements that could support innovation in carbon management, consistent with evolving national and international priorities.

As we navigate this landscape, it’s critical for the mining sector to commit to scientific rigour, technological advancement, and proactive engagement with policymakers. By tackling these challenges head-on, Australia has the unique opportunity to solidify its position as a global leader in mineral carbonation. This involves transforming our vast geological resources into effective, verifiable solutions to achieve net zero emissions and embrace a more circular economy.

The BHP Mount Keith Nickel West mine pilot project serves as an essential case study, illustrating both the challenges and potential of mineral carbonation. As the nation strives towards ambitious emissions targets, the time to act is now, transforming mine waste into sustainable solutions for a cleaner future.

About the author
Dr Zafu Assefa Teferi is a Principal Project Officer at the Minerals Research Institute of Western Australia (MRIWA). Dr Teferi leads MRIWA’s Accelerated Mineral Carbonation Research Program, collaborating with leading scientists and research groups to address the challenges and opportunities facing the industry’s future.

Disclaimer
The views expressed in this article are the author’s own and do not represent the official position of the Western Australian Government or the Minerals Research Institue of Western Australia.