BHP has signed a deal that will see it meet half of the electricity needs across its Queensland coal mines from low-emissions sources, including solar and wind.

The company says the renewable power purchasing agreement will help it halve emissions from electricity use in its Queensland operations by 2025, based on FY2020 levels.

The agreement, with state-owned clean energy generator and retailer CleanCo, will run for five years from January , 2021.

It will support the development of new solar and wind farms in Queensland – the Western Downs Green Power Hub due for completion in late 2022, and Karara Wind Farm due for completion in early 2023.

“This is an important step forward in BHP’s transition to more sustainable energy use across our portfolio, and a first for our Australian operations” BHP president minerals Australia Edgar Basto said.

For the first two years, power will be contracted from CleanCo’s low-emissions portfolio which includes hydro and gas generation assets.

From late 2022, the newly operational solar and wind farms are expected to progressively contribute up to half the electricity requirements, with the remainder supported by CleanCo’s low-emissions portfolio.

BHP says the deal will effectively displace an estimated 1.7 million tonnes of CO2e between 2021 and 2025 – equivalent to the annual emissions of about 400,000 combustion engine cars.

Combined with large-scale generation certificates, it will enable BHP to reduce Scope 2 emissions from its Queensland operations by 50 per cent by 2025, based on FY2020 levels.

“BHP’s announcement is a great example of how Queensland’s resources industry is working hard to make a smooth transition to a low carbon economy and is another sign of our commitment to embracing new technologies which lower emissions and deliver reliable energy,” Queensland Resources Council chief executive Ian Macfarlane said.