Welcome to Rio Tinto's 2020 Sustainability Seminar. There is absolutely no doubt that we are holding this session at an unprecedented time as the world tries to contain COVID-nineteen. After carefully considering it, we decided to go ahead with this event online rather than in person for obvious reasons. As we believe it remains important to discuss sustainability issues even at difficult times like these. It is a great opportunity for us to connect and continue the dialogue.
Today, we will explain why sustainability is core to our strategy. We will share our investment thinking and discipline in this area and go into greater detail on our approach to climate and water. Both of these dimensions, along with health and safety, are key to our approach to sustainability. You are all familiar with this slide. At Rio Tinto, our purpose is clear.
As pioneers in mining and metals, we produce materials essential to human progress. Rio Tinto provides the materials used in everyday life, such as copper, iron ore, aluminum and minerals. Indeed, during this COVID-nineteen crisis, many governments around the world have defined the mining industry as essential, given the important economic and social contribution we make. Key to our strong financial performance and subsequent contribution to society is sustainability, an important enabler of our strategy. Our aim remains to perform today and transform for tomorrow, for tomorrow that will, no doubt, be very different from today.
Under any future scenario, we remain certain that both a strong financial and sustainability performance will continue to serve our customers, communities and shareholders well. Let me start with a few comments on COVID-nineteen, which is a human tragedy on a global scale. At Rio Tinto, we have 5 key focus areas to maintain the health and safety of our employees and communities to deliver product to our customers by protecting our assets to generate cash to maintain our balance sheet strength to manage our partnerships with governments, customers, suppliers and shareholders and to stay resilient as a business and as a team. All of our operations are currently running, and we continue to deliver products to our customers and contribute to economies and communities. This is absolutely vital right now.
Rio Tinto has introduced a number of measures to protect our employees and assets. We have business resilience teams in action across the business. We have introduced a number of health measures to protect our employees and communities, such as increased health and safety controls at all of our operations, a reduction in the number of flying fly out employees at some of our sites and many of our teams are working from home. Although there have been some inevitable impacts on our business, our aim is to remain resilient and to emerge from this crisis stronger. Reaching to a strong balance sheet and world class asset portfolio means we are well positioned to do this.
Let me share some views on how we see the world. For some time now, we have talked about a new era of complexity, one of growing political tensions, higher society expectations and technology disruption. These 3 interconnected forces remain highly relevant, and in many respects, they have become even more so this year. Through these current health crisis, we can see all of these dimensions at play with different tension points. Although at Rio, we do not see this era of complexity as presenting just downside risk, there is plenty of opportunity as well.
We have applied our 4P strategy across a number of future scenarios. And under each of them, we believe we are well positioned for success. I am confident we will continue to deliver high quality products for our customers, superior value for our shareholders and well for all of our communities in the years to come. Underpinning our ability to do this is sustainability. Rio has a significant role to play in the transition to a low carbon economy.
Iron ore is an essential ingredient of steel, and steel is an essential material for human progress. There is no viable low carbon alternatives as things stand. And in iron ore, we have a world class business, delivering a 72 percent EBITDA margin in 2019. Our Canadian Aluminum business is at the bottom of the cost and emissions curve, thanks to our hydro based and sector leading technology. It is well positioned to meet future market demands in North America.
Copper will play a key role in the energy transition, with renewables typically being more copper intensive. We are growing our copper exposure through our existing pipeline and through exploration. Looking to the future, we are also transforming our portfolio of products underpinned by work class assets to support the transition to a low carbon economy. For example, we are the only large diversified company not mining coal or extracting oil and gas. There is no doubt that the conversation on sustainability is complex.
As one example, let's take a step back and consider the transition to a low carbon future. There are no easy answers. There is no clear pathway right now for the world to get to net zero emissions by 2,050. The ambition is clear, but the pathway is not. This will require electrification of transport, energy and resource efficiency across the value chain, decarbonization of energy generation, transformation of agriculture and land use to name but a few.
The global health pandemic creates another dimension to consider around how to balance the delivery of short term economic stimulus, which will be required with the action needed to meet climate goals. The challenge for the world and for the resource industry is to continue the focus on poverty reduction and wealth creation, while delivering climate action. This will require effort and cooperation between businesses, consumers, governments and shareholders. There will need to be trade offs. And there are very different views across countries, communities, politics and businesses.
What we need to have are honest conversations. Rio is committed to being part of this conversation. As I said at the outset, sustainability is absolutely vital to everything we do. It is the work of our assets, our commercial teams and our entire business. It's about performance, not just nice words.
Our approach has 3 key pillars: 1st, running a safe, responsible and profitable business. This means looking after the health, safety and well-being of the workforce, investing in our people, having clear expectation on human rights, environment, talent management and conducting business with integrity. 2nd, collaborating to enable long term economic benefits. This is about enabling the communities in which we operate, including many which have indigenous groups. We contribute to social and economic development and are absolutely transparent in the taxes and royalties we pay the governments.
3rd, pioneering materials for human progress. Here, we focus on our contribution to tackling climate change, while providing materials for the future. All of this is underpinned by partnerships. Strong sustainability solutions cannot be delivered by us alone. We think this is even more important in the current environment.
Of course, performance in sustainability is key, and measuring and tracking our delivery against our stated commitments is also a priority. Responsibility for the identification, evaluating and managing risk sits with employees and leaders working within a group wide risk management framework. This includes three lines of assurance: employees and business leaders, support functions and internal audit. Let me share an example. In relation to climate change, our climate strategy sits within our business strategy and is led by Peter Toff, our Head of Corporate Development.
The Board is responsible for endorsing our climate change strategy, targets and policies. And our product group teams, supported by our Climate Change Center of Excellence, are responsible for executing our climate plans. The Sustainability Committee monitors progress against our targets and incentive plans for EXO members and senior leaders include an element based on delivery of our climate change strategy. And we are making good progress. Let me give you some examples.
In 2019, we had no fatalities at any Creo operations. This reflects the work of everyone, our colleagues and contractors around the world, but we must maintain this and keep the focus. We paid $7,600,000,000 in taxes and royalties globally in 2019 and made the direct economic contribution of over $45,000,000,000 We worked with 37,000 suppliers in more than 120 locations with a total spend of around $17,000,000,000 in 2019. We also made $36,000,000 of voluntary community investments. We also have thousands of retail shareholders.
So we are vital contributors to economies, communities, shareholders and supply chains. Over the years, we have been working hard to create wealth in a responsible and sustainable way. We have improved our environmental performance, reducing our global greenhouse gas emissions by 46% over the last 10 years. You will hear more today about how we will plan to further reduce our emissions to 2,030 and to net 0 emissions from our operations by 2,050. We also ended 2019 as number 2 on the global human rights index, just behind Adidas.
As I said earlier, for Rio Tinto, it's all about performance, not just nice words. And in 2019, we demonstrated how sustainability is core to our strategy. With that, I will hand over now to Peter.
Thank you, JF. It's a pleasure to be here with you today, even if only virtually. I am Peter Toth, Head of Corporate Development and Strategy. As Jairus mentioned, I have overall responsibility for our climate strategy, which puts it firmly at the core of our business. There can be no strategy or business development conversation at Rio Tinto today without discussing its environmental impact.
These factors now rate equally with other metrics such as commodity price assumptions, community impact, productivity or capital intensity, just to name a few. The four areas of our climate strategy are intuitive and simple, yet powerful, both individually and in combination. These are to produce the materials essential for a low carbon future, to reduce the carbon footprint of our operations, to partner in order to reduce the carbon footprint across our value chains and to enhance our resilience to physical climate risks. I'll cover all 4, but we'll mainly focus on our climate targets and partnership approach. Our latest climate report released in February provides all the detail.
As Jay has said, our purpose is to produce the materials essential to human progress, and we have a portfolio that is well positioned for the low carbon transition. Iron ore and steel is a fundamental building block of both developing and developed economies through different stages of the industrialization and urbanization process. Aluminum is highly recyclable and widely used in energy efficient transport solutions. Copper is a superior conductor supporting the electrification of the energy system from electric motors, wind turbines and solar panels. And we are working on developing potential opportunities in lithium and other battery minerals critical to the storage of renewable energy.
What is also important is what we don't produce. We don't mine coal or extract oil and gas and remain the only major in the resource sector without fossil fuels in its portfolio. We believe that fossil fuels will increasingly be substituted for renewable energy as the world transitions to a low carbon economy. In contrast, there is little room for substitution for the products we do produce. And as the low carbon transition gains pace, we expect increased intensity of use for these materials, both in industry and in society.
While at different stages of their life cycles, all of our products are critical materials to human progress and play a critical role in the low carbon transition. Let's take a look at Rio's carbon footprint. Over 70% of our Scope 1 and 2 emissions are from our aluminum business. Both alumina refining and aluminum smelting are energy intensive high temperature processes. Most of our remaining emissions are from our mining operations, driven mostly by power generation and diesel consumption in our rail, trunks and mining equipment.
Improving energy efficiency has been an important driver of our efforts to tackle emissions to date. Since 2008, we have reduced our absolute emissions at our managed operations by 46%, and this represents a reduction of 18% when excluding divestments including coal. We have also reduced the carbon intensity of our managed operations by 29% over this period. As you can see, a lot of hard work has already been done, and most of our assets have reached a very competitive level of carbon intensity. While this is a great place to be, it also means that any material improvement in emissions intensity will be challenging without the help of huge technology breakthroughs.
Aluminum smelting requires significant amounts of electricity, so our aggregate electricity consumption is much higher than our peers. However, 76% of our electricity consumed by our managed operations comes from renewable sources. This is on average around 3x the proportion of renewable electricity in the grid globally today, primarily due to our high use of hydropower. We continue to look for opportunities to further increase our share of renewables across the business. Last year, we shut the core fire power plant at our Canacol's copper mine in Utah and are instead purchasing renewable energy certificates, reducing the operation's annual carbon footprint by 65% or the equivalent of about 1,000,000 tonnes of carbon dioxide.
While renewable energy credits and offsets remain an abatement of last resort for us, the appropriate use of high quality offsets can and will play a role in our abatement strategy. We spent a significant amount of time in 2019 developing industry intensity curves for all our commodities along with marginal abatement curves for all our assets and projects. What we found was that most of our assets sit comfortably in the bottom half of industry carbon intensity curves or have pathways to get there, such as in our corporate business. This is the direct result of better energy efficiencies and a higher proportion of renewable energy usage than our peers. In Canada, for example, the emissions from our smelters are only 2.3 tonnes of CO2 per tonne of aluminum, around 80% below the industry average of over 12 tonnes.
We have also completed asset by asset analysis of mitigation options to inform our 2030 targets and long term decarbonization pathways. We have conducted detailed assessments of around 60 projects and are continuing to develop marginal abatement costs or MAC curves for each asset and project in our portfolio. As you can see, many of the more cost effective opportunities involve energy efficiency focused projects as well as replacing natural gas with renewables, mainly in the Pilbara. These projects sit below the line in the NPV positive area of the back curve. And while they might not always meet our typical investment hurdles, they are NPV positive.
Our MAC analysis developed a project pipeline for each asset, product group, geography and the company as a whole, and these will help guide us in our capital allocation decisions both bottom up and top down. When we then reviewed different combinations of the most technically and commercially feasible projects that achieved group wide absolute reductions of between 5% 35% by 2,030. Our 2,030 target of 15% does not include early closures of any of our assets. The Pacific Aluminum assets, as you know, are challenged, and we are working with governments, regulators and other stakeholders to get them on a sound commercial footing. Of course, our target is based on our current analysis of technically and commercially viable projects and this is expected to change over time.
As climate policies are implemented regionally and globally and as low carbon technologies are developed and commercialized. As noted earlier, we will continue to update our MAC curve analysis and we'll look for opportunities to bring forward abatement options wherever possible. As you know, our 2030 targets are to reduce our absolute emissions by 15% and our carbon intensity by 30%. In total, we expect to reduce emissions by around 4,800,000 tonnes per year by 2,030. Implicit in these targets is the assumption that organic growth between now and 2030 will be carbon neutral overall.
To help achieve our targets, we expect to invest around $1,000,000,000 over the next 5 years in climate related projects. And our long term ambition is to achieve net 0 emissions across our operations by 2,050. Nigel will provide more detail on our long term decarbonization pathways and some interesting technology developments to support these initiatives. The third area of our climate strategy is to partner to reduce the carbon footprint across the value chain. While the carbon footprint of our operations is around 32,000,000 tonnes of CO2 equivalent, we operate within value chains, which have significant scale and global reach.
They also include processes that are highly energy and carbon intensive, such as aluminum smelting and steelmaking. Around 9% of the global carbon dioxide emissions are from steel production, and the aluminum sector accounts for around 3% of the total. Our approach to managing emissions depends on our level of influence. We obviously address the impact of our own operations and can also influence our non managed assets through our joint venture arrangements. This is the boundary for which we have set targets to 2,030 and stated our ambition to reach net 0 by 2,050.
Our Scope 3 ambitions are primarily from our customers processing iron ore into steel and bauxite into alumina and into aluminum. Realistically, our ability to directly influence our customers' emissions is limited. It is even difficult to accurately quantify their emissions, and so our strategy is to work in partnership across these value chains. Let me give you a bit more detail about our approach to Scope 3. The diversity and makeup of Rio Tinto's portfolio enhances the resilience of our business as our materials are essential to the low carbon transition.
Some energy and expected companies that do produce fossil fuels are setting scope 3 targets and goals. They can do this because they are able to switch from high carbon to lower carbon products, for example, from oil production to natural gas or renewables or allow for the decline of their fossil fuel production and resource base over time. As we do not produce fossil fuels, we cannot switch or substitute the products in our portfolio to lower carbon options or rely on the decline or depletion of reservoirs, resource bases or the actual production and sales of fossil fuels. It is technically feasible to reduce carbon emissions from the production of steel, for example, by replacing metallurgical coal with hydrogen or using carbon capture and storage. However, these are not technically or commercially viable options today.
And importantly, even if they were, there is no substitute for iron ore in the steel value chain. It's worth emphasizing that low carbon that the low carbon transition in the aluminum and steel sectors is a transition away from using carbon based energy sources or reductants. It is not a transition away from the use of bauxite or iron ore itself. So there is much less scope for substitution of our products apart from some expected increases in the use of scrap and recycling, but within availability and quality constraints. We recognize the need to reduce carbon emissions across the value chain.
And although it isn't appropriate or practical for us to set targets, we are taking action. As J. S. Mentioned, we think the best solution to the climate change the best solution to the climate change challenge will come from global collaboration. This is why we are working with partners who can be customers, suppliers or even competitors across the value chain to reduce emissions through innovative and ambitious partnerships.
For example, in 2019, we entered into a partnership with BaWu and Tsinghua University in China. Together, we are developing and implementing new methods to reduce carbon emissions and improve environmental performance across the steelmaking process. Our aim this year is to use the Rio Tinto and Chinko University Joint Research Center to explore long term commercial pathways to low carbon steel, manage tailing rigs and explore ways to reduce, reprocess and generate value from mineral and other waste, and also to hold a partnership forum to bring together our climate leaders to focus on decarbonization over the full value chain. We are already making progress. And while we can't disclose much more today, we will update you later this year.
Turning to some concrete examples now. In 2018, in partnership with Alcoa and with the support from Apple and the governments of Canada and Quebec, we announced Allosys. This is the world's first carbon free aluminum smelting process using inert anodes in place of carbon. Our LSS technology can eliminate all direct greenhouse gases from the traditional aluminum smelting process. And in December 2019, EPEL purchased the 1st commercial batch of aluminum from Alysys.
Nigel will talk about Alysys in more detail in a minute. Elesys is just one example of the type of partnerships bringing together multiple stakeholders from the private and public sector to develop breakthrough low carbon technology. Many similar collaborations will be needed, and government support may also be necessary to support development and commercialization. Finally, the 4th area of our climate strategy is to enhance our resilience to the physical risks of climate change. As a mining company, we operate in diverse geographies where the best deposits can be found.
We operate from ice bound Northern Canada to the Gobi Desert. We therefore have extensive experience in preparing for and managing extreme weather, be it this water scarcity or the impacts of tropical cyclones. We consider these climate related risks over the life of our operations from the way we design, develop, operate and eventually close and rehabilitate projects. In our climate report last year, we described our assessment of our assets and projects where we operate with chronic and acute risks of climate change. In this year's report, we highlight the range of controls in place to manage the threat of extreme weather.
These controls help to keep our people safe and allow our operations to return to normal capacity with a minimal financial impact as quickly as possible after an event. One last important note before I wrap up. Last year, we also created a new energy and climate change center of excellence within Rio Tinto. This adds to our other established centers of excellence in surface mining, underground mining and processing. The key role of this new center of excellence is to support the execution of our climate change strategy.
On that note, let me now hand over to Nigel Stewart, who will provide more color and will also update you on how we are harnessing new technologies to meet our climate change targets.
Thanks, Peter, and hello, everyone. I'm Nigel Stewart, the Head of Group Technical Processing. As Peter just mentioned, in September 2019, we created the new Energy and Climate Change Center of Excellence. The key role of the Center of Excellence is to bring to bear and coordinate the talents across the company to support our operating assets in delivering Rio Tinto's climate change targets and our longer term ambition of being carbon neutral by 2,050. So how are we coordinating the climate change network across the group?
Through the center of excellence, we're supporting the integration and execution of energy and climate change strategy. We are embedding the new emission target within the business and tracking performance. We are working with assets on energy productivity and finding value accretive methods to repower with renewables. We're developing technology roadmaps linking operations to viable technology solutions and partners, both pre-two thousand and thirty and beyond. We are supporting the assets to develop our abatement project pipeline and manage access to the abatement fund.
And we're identifying opportunities to make recommendations on the use of offsets. We also have a key role to play in finding and coordinating external partnerships that support the development and implementation of technology solutions, particularly in areas where technology pathways do not currently exist. Technology will be a key enabler of our ambition to be net 0 by 2,050. Our asset by asset reviews in 2019 identify technologies of interest. I'll talk shortly about our thinking around further de decarbonizing the Pilbara electricity network and our surface mines.
But firstly, let me give you an overview. Technology has a key role to play in making our existing assets, which have many years of operation ahead of them, more efficient and productive. Improving the fuel efficiency of our fleet reduces costs and emissions. But efficiency can only be a transitional step as we need to find a way to transform our operations to forms of 0 emission energy. As Peter said, renewable energy technology is already prevalent in our business today.
However, our pathway to 0 emissions requires further repowering with renewables. This must be done in a way that reduces costs and maintains security of supply. Integration technologies and storage will be critical to the success of achieving a higher penetration of renewable energy. Then there is Elesys carbon free aluminum processing and our work on further decarbonizing surface mines,
and I will
talk about each of these. Lastly, there are hard to abate emissions, which include the heat and steam used in our alumina refineries and in our iron and titanium processing sites. Whilst there are existing technologies like concentrated solar or geothermal, they are not currently available or practical at our existing operations, but these remain as technologies of interest. Technologies like hydrogen or plasma torches, which can use renewable energy, may provide a pathway to replacement of fossil fuels for heat and steam. This technology is at an early stage of development and deployment and our focus is on understanding development and deployment timelines and looking for opportunities to pilot some of these technologies in our operations in the coming years.
Our long term ambition is to reach net 0 emissions by 2,050. And as Peter said, we expect that high quality offsets and removals will form a component of the decarbonization strategy. However, we appreciate the concerns about the integrity of some forest carbon offsets. So in 2020, we will start by assessing the potential to develop carbon offsets at our own sites. Let me talk now about our thinking for the Pilbara, both short term and longer term.
Ultimately, we are investigating ways to transition our Pilbara electricity network to renewable energy whilst maintaining a secure and low cost supply of electricity to our mines and ports. We completed a technology options analysis in 2019, which outlined a pathway to decarbonize the Pilbara over a series of project stages. We have announced Stage 1, comprising a 34 Megawatt solar PV facility at Caudaidore and a 45 Megawatt, 12 Megawatt hour battery energy storage system at Tom Price. Stage 2 studies commenced in 2020 and are investigating additional renewable energy and battery projects like this. Wind monitoring has commenced in 2 locations.
Stage 3 is more conceptual at this stage and includes a higher penetration of renewables, large scale energy storage and also diesel substitution in our mobile fleet. A staged approach allows us to manage risk, lets us build capacity and learning, take advantage of future technology cost reductions and manage our gas positions. As more and more intermittent energy sources are connected to a network, the challenge to maintain security of supply increases. Rio Tinto owns and operates its network and has fast response open cycle gas turbine technology as our source of energy. This gives us an advantage, allowing us to manage the intermittency risk as we stage development of the network transition to renewable energy.
Our ownership also provides us with easier pathways for network expansion, which will be necessary as we move to electrify our fleet. As Peter mentioned earlier, we are actively pursuing a breakthrough on direct greenhouse gas free aluminum smelting through our Elesys joint venture with Alcoa. The Elesys technology uses what are known as inert anodes, replacing the traditional carbon anodes in the smelting process with proprietary materials. Currently, when a carbon anode is consumed in the process of electrolyzing alumina to aluminum, it releases greenhouse gases along with other byproducts such as perfluorocarbons, carbon monoxide, sulfur dioxide and nitrogen oxides. Using an inert anode separates alumina into its two elements, aluminium and pure oxygen, without the release of any greenhouse gases in the smelting process.
Due to the design of the anode and the fact that it is not being consumed, this technology has the potential to reduce cost of aluminum plants while increasing their production capacity. The technology has been produced for metal at research scale since 2,009. And as Peter said, the first batch of Elesys aluminum was purchased recently by Apple. Elisys is now working to further develop and scale up the technology so that it can be retrofitted into existing smelters or used for new ones. The new Elisys Rich Research and Development Center is under construction at Rio Tinto's Complex Jean Pierre in Quebec, Canada, the site of our Arbida smelter, Baudreuil refinery and Arbida research and development center.
The decarbonization pathway of our surface mines is one of the key areas of focus. In 2019, we developed a group wide technology roadmap for our surface mines. Low emission technologies such as electric or hydrogen trucks are emerging. Commercially deployable technology is likely to take some years to develop, and we are working with our suppliers directly and through partnerships like the ICMN's Innovation for Cleaner, Safer Vehicles program to accelerate development and deployment of these technologies. Currently, we have a large capital investment in our current fossil fuel fleet.
So we continue to ensure that we use these assets efficiently and find ways to reduce emissions. In the Pilbara, we have repowered our haul trucks with the very latest in fuel efficient engines. At the end of 2019, we have passed the halfway mark of this multiyear $100,000,000 program converting around 2 30 haul trucks. The trucks will also be fitted with a fuel saver control strategy, delivering a total fuel saving of 11% compared to the original configuration. We are also taking this a stage further by trialing dual fuel retrofit technology on haul trucks that offer even further reductions in greenhouse gas emissions.
In late 2019, we began a trial of a mobile surge load at our Kennicott Copper Mine. It is an integrated hopper and loading bin that accepts ore directly from the loading unit. We expect to see a 50 percent increase in loading unit productivity and 98% accuracy in loading trucks, again, enabling a reduced carbon footprint. I will now hand over to Theresea Odd to talk about the management of water resources. But in summary, it is only through technology that we will tackle the challenge of decarbonizing our business and indeed tackle the important task of carefully managing water and other environmental challenges.
We will do this with dedicated investment in our own expertise and through partnerships with others. Thank you.
Thanks, Nigel. Hello, everyone. I'm Therese Aart, Chief Advisor, Environment. At Rio Tinto, we see ourselves as the stewards of water as a shared resource. We recognize the importance of water to our neighbors living in the watersheds in which we operate as well as its importance to the environment.
We support the International Council on Mining and Metals' position statement on water stewardship. Since 2019, we have been reporting our practices against commitments outlined in this statement. These include applying strong and transparent water governance, managing water operations effectively and collaborating to achieve responsible and sustainable water use. Most of the questions that we have received from investors regarding water pertain to how we manage our consumption in areas of water scarcity, such as Oyu Tolgoi in Mongolia, Kennecott in the U. S.
And the Pilbara in Australia. Based on the 2019 Global Water Assessment tool of the World Business Council, about 40% of our managed sites were assessed as operating in a water stressed environment. However, none of these sites were locally assessed as having its operations impacted by water availability. The majority of our sites are in fact subtropical or tropical locations, places such as Madagascar, tropical Northeastern Australia or Canada. So context is everything when it comes to managing water and the abundance of water does not mean that there is no risk if not managed correctly.
This is why at Rio Tinto, our approach to water stewardship centers around a set of 4 water risk themes. The first is water as a resource and its availability for our operations, our host communities and the environment. The second consideration is water quantity and quality to ensure that we effectively mitigate the impacts that our operations could have on water flows and water quality. This is particularly relevant when we are surrounded by water, for instance, in tropical regions like our mineral sands operation in Madagascar, where separation and treatment before discharge are paramount. Thirdly, we focus on ensuring that our dewatering practices, where we have to remove water to access ore bodies, have minimal impact on ecosystems.
An example here would be pumping water from our iron ore mines in the semi arid environment of the Pilbara. Finally, we work to minimize the need for ongoing water management post closure. For example, preventing reactive materials leaching into the surface or groundwater. This is something of particular focus in our copper operations. We have had a water target program since 2,000 and 9 and our latest set of targets represents a maturing of our approach.
The key focus is now on a group wide target that aims to increase disclosure to a site by site level to help improve the awareness of water use in our industry and to drive good water stewardship across all assets. The data set from this program will help us drive future targets to further build resilience in the face of climatic shifts. In addition, water stewardship targets at 6 sites have been selected to address specific issues that require improvements in our business. These targets are based on a deep dive of the 4 water risk themes across the portfolio and represent a prioritized set of activities. First, at our Pilbara iron ore business in Western Australia, we aim to complete 6 managed aquifer recharge investigations by 2023.
These are studies into how to best reestablish groundwater levels following mining. 2nd, at the Oyu Tolgoi copper operation in Mongolia, we aim to maintain average annual water use efficiency at 5.50 liters per tonne of ore to concentrator from 2019 to 2023. 3rd, at our Kennacott copper operation in Utah, by 2023, we are targeting a 5% reduction in imported water per tonne of ore milled at the concentrator compared with the 2014 to 2018 baseline of 1480 7 liters per tonne. In the Northern Territory of Australia, ERA's Ranger uranium plant will achieve its total process water inventory treatment volume plan by 2023. What this means is that all the process water currently held on-site will be treated to enable the release to the natural environment.
5th, our QMM Heavy mineral sands operation in subtropical Madagascar is currently developing a new site water management approach, which will be implemented by 2023. And finally, by 2023, Queensland Illumina Limited will complete water related improvement projects based on their 5 year environment strategy. These will include infrastructure upgrades and checks and work on surface and groundwater interactions. To give you a bit more flavor, let me highlight 2 case studies. Hoya Tolgoi is located in the arid water scarce environment of the southern Gobi Desert of Mongolia.
When we designed the operation, one essential aspect was to ensure that we did not impact other water users, such as the nomadic herders. The advanced design of our tailings thickener sees water volumes required to process the copper at half the industry average with the recycling of more than 80% of that water. Importantly, we draw our water from a deep aquifer of non potable saline water that has no connection to the shallow aquifers used by herders. Also, as part of our engagement with local communities, we have restored collapsed and unusable herder wells and installed additional wells where this was not possible. Finally, to ensure transparency, we involved local communities in our water monitoring activities.
At our iron ore business in the Pilbara in Western Australia, groundwater impacts associated with mining below the water table are a key focus for us. We are carefully studying managed aquifer recharge as a potential method to help with water management in the Pilbara. This requires a thorough understanding of how water flows through and is stored underground as well as how underground water is replenished. Our work includes a number of field tests of this process across the Pilbara operations, and the outcome of these will inform the implementation of aquifer management programs across the business. To conclude then, 1st and foremost, we recognize importance of water to the communities and environments in which we operate.
As well as rigorous management of daily water use in our operations, we are committed to carefully managing these resources over the life of operation. We are also increasing the disclosure of our water use for investors and other groups and have set clear targets for the focus areas in our business. I will now hand over to our CFO, Jacob Stauffelm, who will talk you through our investment approach.
Thank you, and welcome to everybody listening today. I'm delighted to join you today as sustainability is a topic that is close to my heart. At Rio Tinto, our purpose is to produce the materials essential to human progress. We also want to be part of the solution to global challenges such as climate change. You've just heard from J.
S, Peter and Nigel that we are taking a bottom up asset by asset and numerical approach to meet our 2,030 targets and long term decarbonization pathways. As the CFO of Rio Tinto, I'm pleased to tell you that what we are doing as a company on climate change and sustainability so far goes hand in hand with sound economics and shareholder value. In February, we announced that we will spend $1,000,000,000 in the next 5 years on climate related expenditures. This includes research and development, emission reduction and climate resilience projects. Some of this will be expensed as OpEx and some will be CapEx.
A portion of this will undertake ourselves, but we will also work with partners on some of these initiatives. So far, we have approved CAD55 million, which is our share, on the R and D related expenditures for the Elesys joint venture with Alcoa, Apple and the federal government of Canada and Quebec. Recently, we also approved $98,000,000 in CapEx related to renewable projects at our newest iron ore mine, Quadagiri, which is under construction in the Pilbara. You heard earlier that R and D spend and capital projects have been identified on a bottom up basis by our Energy and Climate Change Center of Excellence, corporate strategy and our product group teams to identify emissions reduction opportunities across our assets. We have assessed around 60 projects in detail and developed marginal abatement cost curves for all our major assets.
From these 60 projects, we have selected those where it is technically and commercially feasible to achieve completion within the next 10 years. Collectively, these projects are expected to deliver a 15% reduction in absolute emissions and 30% reduction in emission intensity by 2,030. These projects undergo the same financial and investment analysis as all our investments. And so far, all of these are NPV positive. Whilst they may not be as profitable as some of our usual minor infrastructure projects, they are all above our cost of capital and will continue to be subject to the very robust Rio Tinto capital allocation framework.
We have been and will continue to be very disciplined in allocating capital expenditure. Of the portion of the SEK 1,000,000,000 climate expenditure that is capital, some will be sustaining capital, but there will also be replacement and growth CapEx. The investment in renewable power options at our Quadagiri project is a good example of the latter. Each project though will be slightly different. The Quadagiri Renewables project, for example, were a part of a new mine development for which an investment in power would be required.
Here, we also have the benefit of existing infrastructure, which provide complementary firming for the renewables. The capital portion of the $1,000,000,000 spent has already been included in our current CapEx guidance. Finally, I would like to note that this €1,000,000,000 is for the next 5 years, and we will need to spend more in the following 5 years to get to the 2,030 target. As I highlighted at our results presentation in February and our investor seminar in October of last year, Rio Tinto has a great starting base with regards to sustainability. As Gies and Peter have outlined, we do not extract fossil fuels.
Around 76% of the power we consume is from renewables, and our assets are at the bottom of the CO2 intensity curves for their respective industries. In 2019, we were able to further improve this position for both Kennecott and Escondida by switching to renewable power at both these assets, so their position will improve during 2020. Our assets are characterized by long mine life and very competitive cost structures, which drives unique resilience and create value to our shareholders and society at large. This is expressed by consistently high payments of dividends and royalties and taxes combined with significant employment offered directly and through our suppliers. Our integrated bottom up and numerical approach to further improving the emissions of our business will protect and improve the starting point and further enhance our resilience.
I will now hand over hand back to JES to conclude the presentation. Thank you.
Thank you, Jacob. So in summary, you will have seen today that our ambition is clear. On Climate, to get to net 0 by 2,050. This is a massive undertaking. It means all of future growth will need to be carbon neutral, and we will need new technologies and partnerships to deliver it.
We do not have a road map right now, but we're working on it. Our 2,030 targets are based on detailed analysis, An additional 30% reduction in emissions intensity from our operations, an additional 15% reduction in absolute emissions from our operations. It comes on the back of 46% reduction in greenhouse gas emissions since 2008. Our targets were developed through detailed marginal abandonment cost curve analysis, MAC, asset by asset. But of course, we will try to do better and more quickly.
We believe it's now about action and results. Indeed, that is why we will invest a further $1,000,000,000 in climate change over the next 5 years to support our work and that of our customers and suppliers, like the $100,000,000 Pill Drive renewable investment that we have announced, like technology breakthrough initiatives such as Elegis. These projects will be delivered with the support of our new Energy and Climate Change Center of Excellence Group, which we established late last year. Our new water target will help us to be to better stewards of this precious resource, whether in the areas we operate where water is scarce or regions where it is plentiful. Water is vital.
It is important to communities, and we understand its importance. We have set our plans and targets carefully and are currently engaged. So in closing, we have a clear purpose. As pioneers in mining and metals, we produce materials essential to UN progress and the low carbon transition. And sustainability is a key enabler of our strategy and financial performance.
Financial performance is absolutely fundamental to sustainability. Indeed, at the heart of our approach to sustainability is profitability. Our track record in this area is strong, and we intend to continue to deliver. We will be part of the solution. Rio is well placed.
We are a resilient business in terms of portfolio and performance. We have a clear strategy to perform and transform. And we will continue to sustainably deliver for our stakeholders day in and day out.