February 15, 2019 Read More →

IEEFA Australia: New open cut mine development refused with climate change cited as key reason

Precedent set in measuring the community cost of carbon emissions

SYDNEY – The NSW Land and Environment Court refused development consent for a new open cut coking coal mine in New South Wales’ Gloucester Valley on 8 February 2019, citing the mine’s likely contribution to climate change as a key reason.

Gloucester Resources Limited (GRL) had sought development consent for the Rocky Hill Coal Project to produce 21 million tonnes of coal over a period of 16 years.

IEEFA views the court decision by Chief Judge Preston as setting an important benchmark that the community costs of carbon emissions should be clearly considered in a planning decision, and that this is relevant for both emissions that are local (scope 1 & 2 in the ‘decision’) or exported (scope 3).  (See Figure 1)

The community cost of carbon emissions is a key aspect of the decision.

Environmental assessments for coal mines have long argued that ‘exported’ carbon emissions in our coal and LNG are not relevant in considering new projects. But this ignores the science that confirms that any carbon emissions released into the atmosphere anywhere affect the global climate.

Australia is a leading fossil fuel producer (Australia is #2 globally in LNG, #1 in coking coal and #2 in thermal coal exports). As such, Australia is one of the largest producers of exported emissions that increase climate change impacts, and which will particularly affect our Pacific neighbours in the Vulnerable Twenty Group (V20).

Coal mining in Australia provides private gain to largely foreign multinational fossil fuel companies. Our communities wear the cost of climate change.

This court decision provides an excellent impetus for the NSW Government, and all governments in Australia and even internationally, to take climate change costs into account in fully evaluating the ‘public cost – private benefit’ equation.

In light of the fact that existing approved projects will generate enough emissions to exceed our carbon budget, it is notable that there is no NSW or Federal policy that prioritises development of higher value fossil fuel projects like Rocky Hill’s coking coal proposal over lower quality, lower value thermal coal alternatives.

Australia would be better placed driving investment and employment towards sustainable industries of the future and developing industries that solve rather than exacerbate the magnitude of the climate problem facing the world today.

Australia is already a world leader in the mining and supply of critical resources like rare earths, lithium, cobalt and copper to the high growth, high value industries of the future.

Climate change is a real and pressing issue. Australia should transition away from high risk areas of thermal coal mining to those high growth areas that will continue to boom as world interest in lithium ion batteries, electric vehicles, solar and wind turbines continues to accelerate. The Western Australian government’s recent strategy paper on the future of that state’s battery industry and need to ensure and promote downstream mineral processing in Australia before export spells this out brilliantly.

This court case sets a globally relevant benchmark whereby governments and financial institutions will increasingly have to put in place effective, universal policies to cease the use of unabated coal in order to drastically reduce global carbon emissions.

Absent the development of commercially viable carbon capture and storage (CCS), the International Energy Agency (IEA) says global coal use must absolutely cease by 2050 if the world is to have any real chance of limiting climate change to a liveable 1.5-2.0°C.

Chief Judge Preston’s landmark decision gives voice to the necessity of this happening sooner rather than later in the best interests of Australia, and the world.

Figure 1: Scope 1, 2 and 3 Emissions

Scope 1 Emissions Scope 2 Emissions  

Scope 3 Emissions

 

 

Direct greenhouse gas (GHG) sources for the Rocky Hill Coal Project include emissions from undertaking mining operations, including vegetation stripping, release of fugitive methane during open cut mining and combustion of fuels by vehicles, plant and equipment during mining operations. (Air Quality and Health Risk Assessment, p 2A-159)

 

 

Indirect greenhouse gas (GHG) emissions are emissions from the generation of purchased energy products (principally electricity) by the entity.

 

 

Other indirect greenhouse gas (GHG) emissions are emissions that are a consequence of the activities of an entity, but which arise from sources not owned or controlled by that entity.

 

Source: Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7, Land and Environment Court, New South Wales

Tim Buckley ([email protected]) is Director of Energy Finance Studies, IEEFA Australasia.

Related Articles:

IEEFA Australia: New South Wales needs a transition plan, not blind optimism, as coal export markets decline

IEEFA update: Even as forecasts signal decline in global thermal coal markets, Australia courts new mines

IEEFA Australia: Minerals Council report overstates foreign market’s thermal coal import needs to 2030

About IEEFA

The Institute for Energy Economics and Financial Analysis conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org

Comments are closed.