Breadcrumbs
How an accounting shift could conceal millions of tonnes of coal mine emissions
A proposal for open-cut coal mines to self-report their emissions, without external review, transparency, or top-down verification improvements could further undermine reporting standards, and reward coal miners in the process.
Highlights
8.5 Mt
Close to 8.5 Mt CO2-e has been erased after three coal mines shifted their reporting methodology since the Safeguard Mechanism began.
135x
Company-led estimates have reported fugitive emissions up to 135x less than state-based estimates.
47 Mt
By 2050, under-regulated reporting could erase 47 Mt CO2-e from only two coal mines if expansion plans are approved.
About
This report investigates the historical implementation and potential implications of expanding the current application of company-led reporting for open-cut coal mines across Australia. It does so through an assessment of eight operating and two proposed coal mines, and a comparison of emission reporting under respective state-based emissions factors. This was conducted through reviews of individual mine Environmental Impact Statements, Greenhouse Gas Management Plans, and emissions and coal production reporting to the Clean Energy Regulator.
Executive summary
How a methodology shift risks concealing millions of tonnes of emissions
The Australian government’s proposed shift towards unverified company-led emissions estimates could render millions of tonnes of methane invisible, whilst satellite measurements continue to raise serious under-reporting concerns.
Chris Wright Climate Strategy Advisor - Coal Mine Methane, Ember
Unverified company-led emissions reporting at coal mines has regularly led to an outcome you would naturally expect; the overnight erasure of hundreds of thousands of tonnes of CO2-e, without any real mitigation or a change in coal mining. Expanding the existing, under-regulated approach to self-led reporting without holistic improvements to Australia’s sovereign methane measurement and verification capacity will only further undermine the integrity of our emissions inventory, and increase sectoral unfairness across the Safeguard Mechanism.
Holistic approach to MRV
The “urgency” of improved measurement
Australia’s approach to coal mine methane measurement and reporting needs to change, but the problem cannot be addressed with a patchwork solution.
This came to a head last year, when the Federal government tasked the recently reinstated Climate Change Authority (CCA) to conduct a year-long review of the national emissions reporting system, with a particular focus on how coal mines currently estimate their emissions.
Their review included insights from 323 submissions, 100 meetings and three workshops with industry, science and non-governmental experts. It concluded in a scathing assessment of the existing measurement standards for coal mines, noting that “Australia has failed to keep pace with global developments and investment in methane measurement capability”.
As such, it recommended a series of integrated measures to improve transparency, measurement methodologies, and investments to develop Australia’s sovereign methane measurement capacity. Many of these recommendations were made with “urgency”.
On April 29th this year, The Department of Climate Change, Energy, the Environment and Water, proposed to take forward only one of a series of integrated recommendations; to phase out the widely utilised approach to estimating methane emissions from open-cut coal mines using state-based averages, known as method 1.
This approach was developed following initial gas samples taken in 1991, with state-based averages established in 1993. Since then, the NSW state-based emission factor has increased twice, and on three occasions in Queensland. The most recent emissions factor increase in Queensland was developed after analysing more than 1000 drill samples from the Queensland Government’s Petroleum Exploration Dataset, selected to exclude samples from outside active coal mine fields.
While the phase out of state-based emissions factors was clearly recommended by the CCA, they also noted that the existing company-led approach to estimating methane emissions known as method 2, is “disorderly”, and needs to be reviewed “as a matter of urgency”.
Instead of simply replacing one for the other, the CCA report highlighted that the key challenge for the government is not only to improve bottom-up estimates, but to institutionalise mandatory top-down verification systems across Australia’s coal mining industry.
To develop this system, the CCA recommended that a panel of experts should have already been commissioned (“in the first quarter of 2024”) to develop the necessary guidelines, methods and standards for “making transparent, repeatable and credible top-down measurements” across the coal industry.
Unfortunately, the government’s current proposal is to phase out state-based averages, and simply expand company-led reporting (method 2) across all open-cut coal mines. This is without clarity on the recommended method 2 review, and without any changes to the existing methodology, technology or transparency.
At the same time, there is no clarity on whether any of the interrelated improvements, investments or recommended transparency changes that could vastly improve Australia’s sovereign methane monitoring capacity will be undertaken. Some of which are already running late.
In this report, Ember provides the first known review of the potential impact of this shift to expand method 2, six months after the Climate Change Authority recommended the methodology be urgently reviewed due to the serious risks of selective sampling by coal miners.
Winchester South & Caval Ridge
The outlier risk of shifting to company-led estimates
The track record of self-led reporting shows unverified emission levels far lower than state based averages; with some mines reporting over 100 times less.
Utilising current production and emissions reporting data for 2022 and 2023, Ember estimated the potential impact of different estimation methods on actual emission reporting. However, the lack of clarity on how production could increase into the future, and the impact this will have on emission levels, makes forward projections challenging. This is a concern not just for independent assessments, but also for state and federal regulators charged with managing emissions levels.
At a downscaled coal production average of 10 million tonnes per year, the cumulative difference between the existing method 2 estimate for Carmichael mine, versus Queensland’s state-based average, would result in a reduction of over 27 million tonnes of CO2-e over the licensed lifetime of the mine.
However, if coal production were to increase at the growth rates projected in Adani’s latest earnings call, and reach the originally estimated production levels, the difference in cumulative emissions reporting could exceed 100 million tonnes of CO2-e.
Winchester South & HVO
The risk of approving unverified emissions
Maules Creek & Caval Ridge
Method 2 estimates since the Safeguard Mechanism began
Two coal mines have shifted their emissions reporting since the Safeguard Mechanism began, erasing over 1 million tonnes of CO2-e per year.
Safeguard
Impacts on the Safeguard Mechanism
Locking in a company-led emissions reporting regime without critical bottom-up adjustments and top-down verification could undermine the integrity of the Safeguard Mechanism for years to come.
Over the course of a decade, the scale of emissions downscaling highlighted by Caval Ridge and Maules Creek has a material impact on the Safeguard Mechanism’s total reporting.
The Climate Change Authority estimates that 75% of currently reported coal mine methane emissions from Qld and 25% from NSW are estimated using method 1. If the government’s current proposal goes ahead, it would shift a significant number of coal mines across to method 2, which we estimate, would dramatically add to the cumulative emissions erasure displayed above, unless significant amendments are made to prevent it.
Conclusion
We need to get reporting right
A simplistic shift toward company-led reporting without a critical tightening of existing regulations risks further underestimating Australia’s coal mine methane, and undermines efforts to actually reduce real emissions.
State-based emissions factors are simply too coarse, and out of place in the emissions inventory of an advanced economy. Method 1 is unable to account for the nuances of methane emissions at each individual mine. The lack of data specificity also disincentives mitigation opportunities, such as the capture and beneficial use of open-cut waste mine coal gas from operations. Considering the incredible advancements in site and source-based emissions reporting over the last thirty years, it is certainly appropriate to to improve or replace this approach.
However, its broad application does currently ensure that Australia’s coal mine emissions reporting remains within the range of the IPCC’s recommended emission factors. Over time, it has also been able to gradually account for updates and improvements in sampling in both NSW and Queensland.
In contrast, the historical implementation of method 2 has enabled individual coal mines to estimate emission factors more than 100 times lower than state averages. In contrast to method 1 companies applying the self-monitored approach have not actively sought to improve estimations since originally outlined in 2011 .
More so, the lack of specificity, transparency and diversity around coal sampling requirements not only brings the methodology into question, but makes assessing these emission factors incredibly difficult. The lack of requirements to regularly update sampling approaches, or to have samples and estimation calculations reviewed by independent third parties are also clear gaps in the existing reporting legislation. Finally, the inability for any of these estimates to be adjusted over time, as reporting and verification methodologies improve, has and will continue to undermine the integrity of Australia’s coal mine emissions inventory. These are all regulatory shifts that could be easily made to improve the accuracy, transparency and trust in both the existing and any expanded company-led reporting approaches going forward.
With growing satellite evidence, it is becoming increasingly clear that Australia’s open-cut coal mine methane emissions may already be significantly underestimated. The historical trend towards further under-reporting utilising method 2 should therefore be a cause for serious concern.
Without significant transparency amendments to the reporting methodology, the diversification of bottom up sampling, and the crucial back-stop of top-down verification, there is no reason to believe that this trend will not continue.
An expansion of this approach without significant regulatory improvements, would likely not only undermine the integrity of our emissions inventory, but challenge the sectoral fairness of the Safeguard Mechanism. Ahead of Australia’s bid to host COP31, it would also directly contradict our commitments to improving emissions reporting under the Global Methane Pledge.
In the analysis above, we have highlighted how method 2 has been implemented across seven operating and two proposed coal mines. All of these case studies raise serious concerns in both the existing implementation, transparency and end results of utilising a coarse, unverified approach to company-led emissions reporting.
The shift to a reporting regime for open-cut coal mines exclusively utilising method 2-led measurement without conducting a thorough review of the implications and opportunities for improving company-led emissions reporting, poses material risks to the integrity of Australia’s coal mine emissions inventory. This should not be undertaken without further review, and a timely and holistic implementation of the Climate Change Authority’s remaining recommendations.
Supporting Material
Methodology
Disclaimer
The findings in this report are based on publicly available reported emissions and estimates pursuant to Australia’s greenhouse and energy reporting scheme. That scheme adheres to UNFCCC reporting requirements recommended by the IPCC, but does not reflect industry best practice methane measurement, reporting or verification as highlighted by UNECE, and may produce inaccurate methane emissions estimates.
We have noted where reported emissions or estimates may be substantially lower than the actual amount of methane released. This information has been prepared as information or education use only, and does not constitute financial, legal or other professional advice.
The information in this report has been prepared using the material outlined below and although the findings in this report are based on an analysis of that material, no warranty is made as to the completeness, accuracy or reliability of the statements or representations that arise from the material gathered to conduct this analysis. Ember did not have access to any of the listed companies’ internal emissions data, nor emissions data that may be available to State regulators.
Emissions Estimates
Method 1 emissions estimates were identified in Environmental Impact Statements and Annual Reports where possible, and reconstructed where not publicly available. Forward coal production projections were collected in a similar manner, particularly for greenfield mines and those seeking extensions or expansions. When not available, short term production projections were estimated based on average coal production over the last four years, and cross-checked against company estimates. If not publicly available, historical emission gaps between method 1 and method 2 were estimated based on reporting under the Clean Energy Regulator, historical method 1 emission factors, and estimated diesel emissions per tonne of coal production.
Coal methane intensity from Australian coal mines
Ember compiled methane emissions data from coal mines in Australia from the following sources:
- Scope 1 emissions from underground coal mines reporting to the Clean Energy Regulator were used to estimate mine methane intensity. Methane was assumed to be responsible for 80% of reported Scope 1 emissions.
- Gas content at open cut coal mines was compiled from the academic paper by Sagahfi et al. 2013 “Estimating greenhouse gas emissions from open-cut coal mining: application to the Sydney Basin”.
- Estimates of methane emissions from satellite data were compiled from the research paper by P. Sadavarte et al., 2021 “Methane Emissions from Super-emitting Coal Mines in Australia quantified using TROPOMI Satellite Observations”.
- Other satellite data was gathered from estimates of methane emissions fluxes of plumes detected in Australia by Carbon Mapper. The methane emissions detected are assumed to be constant, and calculated as yearly emissions.
Methane emission estimates were compared against best estimates for annual coal production and depth of coal per mine. Coal production and depth were determined through Annual Reports, EIS estimates and company websites.
Estimating emissions reporting from Carmichael Mine
Clarifying the current and future coal production of the Carmichael mine is challenging. In the last two years of mining, Bravus has reported producing 2.7 and 4.8 million tonnes of coal per year. On their website, Bravus also notes that the Carmichael mine has downscaled its initial production potential, to an average of 10 million tonnes of coal per year.
However, in Adani’s latest earnings call for investors, Adani Enterprises Director, Mr. Vinay Prakash, noted that the “Carmichael mine production increased by 47% to 11.2 million metric tonnes” in FY24. He also noted that the mine’s production would be expanding from “11.2 to 14-15 million tonnes” in the next year. At this rate of growth, they could potentially reach their originally proposed surface mining production levels of 48 million tonnes per year before 2030.
As such, the emissions estimate is developed utilising the emissions factor provided in the mine’s Environmental Impact Statement, highlighting how emissions could change over the years of the mine’s licensed operations. The estimate provided in the graph is utilising the conservative estimate of downscaled production currently provided by Bravus, while an additional estimate is provided taking into account current production growth rates to 2028, assuming originally proposed production levels from then on.
Estimating emissions reporting from HVO Continuation project
Current emissions for HVO have been developed using publicly available emissions reporting to the Clean Energy Regulator, as well as company documents.
Forward projections of emissions for HVO’s Continuation project have been developed according to the most recently amended greenhouse gas management plan submitted by EMM on HVO’s behalf.
Correspondence between the NSW EPA and HVO representatives this year indicates that multiple emissions factors may have been developed to estimate methane content. In a letter dated 17 June 2024, HVO noted that emissions are expected to increase “specifically, the deeper coal reserves in gas Domain 1, zones 3 and 4 with methane-rich gas contents between 5 and 7m3 /t.” The estimate of the gas content indicates that the fugitive emissions alone in zones 3 & 4 could be between 0.0952 to 0.13328 t CO2-e /ROMt.
Clarity on these emission factors is not publicly available, nor is a corresponding outline of coal production over time across potentially differing domains or zones where different emissions factors may be applied. As such, fugitive emissions have been projected using an average emission factor based on total coal production and total estimated fugitive emissions over the lifetime of the proposed extension, according to the latest amended fugitive emissions update.
Global Energy Monitor Estimates
Global Energy Monitor employs its Global Coal Mine Tracker to estimate methane emissions at individual mine levels worldwide, aggregating the data on national and global scales. The tracker monitors operational coal mines producing 1 million tonnes or more per year, and smaller operations with available data, providing baseline estimates for coal mine methane emissions. These estimates utilise mine-level activity data, such as production, operating depth, methane content at depth, and emissions factors, following the peer-reviewed Model for Calculating Coal Mine Methane (MC2M) methodology. In cases where precise coal rank and depth data is lacking, supplemental estimates are included for underground and surface operations.
Acknowledgements
Several people played a considerable role in developing and editing this report, including Dody Setiawan, Rini Sucahyo, Reynaldo Dizon, Uni Lee, Sabina Assan, Christiane Yeman, Sachin Sreejith and Tim Baxter.
Acknowledgement of countryEmber acknowledges the Traditional Custodians of the many nations across Australia and their enduring connection to Country and the lands, seas and skies. We pay our respects to Elders past and present and extend that respect to all Indigenous Peoples today.
Cover imageThe Exevale open cut pit at Glencore’s Hail creek coal mine, Australia.
Credit: The Sunrise Project