Submission: Review of the Coal Mine Waste Gas Method

23 January 2025

TO: The Department of Climate Change, Energy, the Environment and Water (DCCEEW)
RE: Review of the Coal Mine Waste Gas Method
 

Thank you for the opportunity to provide a submission to the Emissions Reduction Assurance Committee (ERAC) Review of the Coal Mine Waste Gas (CMWG) method.

IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

This submission is mainly concerned with the effectiveness of the existing CMWG method and the prospects for remaking it including open cut mine eligibility and displacement issues for ventilated air methane (VAM).

An expanded CMWG method could be pivotal in Australia meeting its state, national and international emissions reduction targets. With the existing scheme expiring in March 2025, there is an opportunity to remake the CMWG method to have substantial impact on Australia’s emissions reductions.

Designed to provide the financial incentive to stimulate new and expanded methane abatement in the form of allocating Australian Carbon Credit Units (ACCUs), the CMWG method has a high potential value to coal miners. However, the current scheme has underperformed against expectations. With relatively low adoption, it contributes to approximately 3% of Australia’s greenhouse gas (GHG) emissions reductions. To judge the performance of the scheme in the current design is to misjudge its potential.

Aimed to stimulate new abatement that would otherwise not have occurred, the ACCU’s can play a pivotal role in the delicate early stages of abatement technical maturity, such as with VAM abatement and open cut pre-drainage. Both of these aspects must be prioritised in a redesigned or remade scheme.

Broadening the method to include open cut mines would stimulate the highest-emitting open cut mines to follow in the footsteps of the South Walker Creek open cut mine and examine the methane resources present in their coal mines.

In underground mines, Scope 1 emissions reductions can be met through traditional methods such as flaring and gas drainage. However, the opportunity to abate underground mines has peaked – at about 25% of the emissions amenable to traditional abatement. The remainder is largely in the ventilation air. VAM abatement technologies have been piloted at a number of Australian mine sites.

In the coming years we should see increased emissions disclosures and reporting in mining, such as with ASIC’s mandatory climate-related financial disclosures and planned updates to Australasian Joint Ore Reserves Committee (JORC) reporting. The CMWG method can add measurement rigour.

Methane abatement activity in Australian coal mining has stalled - with activities covering about 15% of all coal mine methane emissions. A remade CMWG method that embraces open cut mines and VAM abatement could stimulate new abatement measures and technologies as well as complementing the government’s Safeguard Mechanism.

Kind regards,

Andrew Gorringe, Energy Finance Analyst – Australian Coal, IEEFA