Mining giant Anglo American has admitted to a 'large blow out' of emissions from its Capcoal mine in Queensland that will cost the company around $10 million in carbon credits.
This will be the biggest surrender of carbon credits in the history of the federal government's safeguard mechanism, which started operating in 2016-17.
Under the safeguard, when a company exceeds limits set by the government, the company is required to purchase and surrender carbon credits to bring its net emissions to a certain level.
If the safeguard mechanism was properly enforced Anglo American's total carbon credit bill would be closer to $50 million, an Australian Conservation Foundation investigation has found.
Anglo American will be at least 841,137 tonnes of carbon dioxide equivalent (CO2e) over its limit at Capcoal by the end of this year, as revealed in company emails obtained by ACF under the Freedom of Information Act.
"Anglo American has blown its emissions limits at Capcoal every year since 2016-17, despite the Clean Energy Regulator giving the company numerous concessions and deadline extensions," said ACF's lead environmental investigator Annica Schoo.
"Anglo American's carbon credit bill would be more like $50 million if the safeguard mechanism was working as it's meant to and the regulator was strictly policing the rules.
"Unfortunately, the safeguard mechanism - the Morrison government's only policy lever to reduce emissions - has big holes in it and Anglo American has taken full advantage of them.
"The company has been permitted to increase its annual limit twice and can now emit 54% more climate pollution than it was originally allowed," she said.
The Clean Energy Regulator gave Anglo American three years to reduce its emissions, without penalty, then after a massive blowout in 2019-20 the regulator granted the company an extra year to rectify its emissions problem, this time citing COVID-19 provisions.
These emissions arise from mining coal, not from burning it. Documents show Anglo American does not expect to have reined in emissions at Capcoal by the new deadline.
"Loopholes like those Anglo has exploited must be closed and the safeguard mechanism's pollution baselines brought down over time, as recommended by the Climate Change Authority and promised by Labor in its new climate policy," Ms Schoo said.
