How an accounting shift could conceal millions of tonnes of coal mine 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.

Australia’s emissions reporting regime is under serious question. Following a year-long review of the national emissions reporting system, the Climate Change Authority recommended a series of integrated changes required to improve transparency, measurement approaches, and top down emissions verification at coal mines across Australia.

Currently, open-cut coal mines can choose to report their fugitive methane emissions through either state-based emissions factors (method 1), or company-led emissions estimates (method 2). Both of these approaches are estimates, and neither can accurately capture the nuances of methane emissions at an individual mine.

However, coal mines which have shifted from method 1 to method 2 estimates have reported dramatic reductions in their emissions reporting to date.

Through an assessment of eight currently operating and two proposed coal mines, this report will highlight how millions of tonnes of CO2-e have simply vanished from Australia’s emissions inventory, as coal miners have shifted from state-based averages, to self-managed estimates. The Australian government is currently considering expanding the rollout of this reporting shift.

In 2012, when Adani considered the emissions from its proposed Carmichael mine, it estimated emissions 135 times lower than the state based average.

Similarly, Hunter Valley Operations coal complex have reduced their emission estimate by 5.5 Mt since shifting from state-based average in 2016. Using the same methodology shift, Caval Ridge coal mine reduced close to half a million tonnes of CO2-e in 2021 alone, and Maules Creek coal mine has reduced their emissions reporting by over 1.8 million tonnes of CO2-e since it began reporting emissions using a company-led estimate in 2021.

Collectively, these three mines may have reduced their reported emissions by close to 8.5 million tonnes of CO2-e since 2016. Over the last two years, when all three mines have been utilising method 2, they may have avoided an average of 2.7 million tonnes per year. This rate would be expected to increase next year, as the Queensland state emissions factor is set to increase by 35%.

These emissions estimates were all conducted through the existing reporting regime which does not have to be externally reviewed, transparently verified, and in most cases, isn’t even made publicly available.

Through these examples and more, this report will highlight the risks that expanding this approach may pose, and the critical need for the government to adopt a more holistic approach to emissions measurement, reporting and verification.

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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 country

Ember 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 image

Aerial view of coal processing facility in the Hunter Valley NSW Australia.

Credit: redbrickstock.com / Alamy Stock Photo