It's been a big few weeks for coal mines.
Author
- Hayley Pring
Senior Associate in Grattan Institute's Energy and Climate Change program, Grattan Institute
Late last month, New South Wales approved the biggest coalmine expansion project in its history, letting Hunter Valley Operations keep digging until 2045. And last week, the High Court of Australia confirmed that the approval of an expansion to another Hunter Valley mine, Mount Pleasant, was invalid.
The debate over the climate emissions impact of both mines has centred on when their coal is burned overseas. The High Court found state planners had looked only at the 2% of Mount Pleasant's emissions released in Australia, and not given enough consideration to the 98% later released when coal is sold and burned in other countries.
But the emissions that coal mines release in Australia matters, too. They count towards Australia's climate targets, and Australia is directly responsible for them.
When NSW's planning commission approved the Hunter Valley Operations mine, it relied heavily on federal rules intended to keep these domestic emissions in check.
But those rules have two problems. First, the methane from open-cut mines is probably underestimated, as I will explain. Second, every coal mine gets the same target for its total emissions (mostly methane, plus carbon dioxide), even though underground mines report nearly six times as much in total emissions per tonne of coal.
Federal rules for both estimating methane and setting emissions targets are under review right now. This is the moment to fix them.
What are the rules?
Most emissions from coal mines are methane , a potent greenhouse gas that escapes from coal seams as the coal is dug up. Tonne for tonne, methane traps about 80 times as much heat as carbon dioxide over 20 years, and it's behind about a third of global warming today.
Methane from coal mines makes up about 5% of Australia's emissions .
The federal government manages these emissions through a policy called the Safeguard Mechanism . This gives each big polluter, such as Chevron's Gorgon gas plant or Qantas' domestic flights, a yearly emissions limit, which decreases over time.
Facilities whose emissions go over their limit must buy carbon credits, while those that reduce their emissions earn credits they can sell.
How methane is measured
Underground mines measure their methane by testing air pumped out of the mine.
Until recently, many open-cut mines estimated their methane using a state-wide average. But now, large mines must test rock samples drilled from their own site instead. The change has sent reported emissions swinging wildly, yet it changes only the estimate, not the methane actually escaping.
For example, Mount Pleasant's fell by three-quarters in 2023-24, though it mined more coal . Glencore's Hail Creek mine in Queensland's Bowen Basin reported a 159% rise .
These estimates reflect questions over accuracy. In 2023, scientists flew aircraft over 17 Queensland coal mines to measure their methane. Above the underground mines, the readings closely matched what the mines reported. But above the open-cut mines, the aircraft found about 3.6 times as much methane as reported.
Satellite data tell a similar story in NSW, home of both Hunter Valley mines. Analysis by energy think tank Ember found the mines producing two-thirds of the state's coal released nearly twice the methane officially reported for the whole state. To put it simply, the official figures appear to drastically understate their methane emissions.
The federal government's own expert panel on methane measurement said last month the aircraft study provides "robust evidence" the estimation method warrants review.
So a mine's reported emissions can swing up or down, without any real attempt to lower emissions. And if emissions aren't counted correctly, polluters don't have to pay for them.
One target, but two very different mines
Open-cut mines dig from the surface, like a giant quarry, and produce more than 80% of Australian coal.
On reported figures , Queensland's open-cut mines emit about 47 kilograms of carbon dioxide equivalent for every tonne of coal. By comparison, underground mines emit about 267kg per tonne.
Yet, the Safeguard mechanism gives every coal mine the same emissions target: 65kgs a tonne . Each year until 2029-30, every mine's limit moves towards that shared target.
In other words, they are allowed to emit more per tonne of coal. Mines that emit less than their limit earn credits for the difference, which they can sell.
Open-cut mines earned about 700,000 credits this way in 2024-25 , worth about $26 million at current carbon credit prices.
How to fix it
First, the federal government should ensure open-cut mines improve the way they estimate their methane, so their reported figures match what they actually release.
The government is reviewing those methods now. Mine estimates should regularly be checked against aircraft measurements. Over time, open-cut mines should also have to measure their methane, as underground mines already do.
Second, the Safeguard Mechanism should set separate limits for open-cut and underground mines, based on those better estimates, and apply a new limit only where it is tighter than the old one.
On today's reported figures, that would reduce open-cut mines' limits by about 1.3 million tonnes a year .
The High Court will force governments to look harder at the coal Australia sends overseas. The methane leaking from mines here deserves the same scrutiny.
Hayley Pring is affiliated with the Grattan Institute.
