Accounting shift drives emissions reduction

A shift from state-based to site-specific emissions estimates may have led to a significant reduction in officially reported emissions especially in NSW, raising concerns about transparency and accountability of this methodological shift, and the real emissions rates.

Open-cut coal mines in Australia do not measure their fugitive methane emissions. Instead, a fugitive emissions factor is estimated based on bore-hole coal samples, which is then multiplied by annual coal production. This approach was first developed at the state level in 1991, with specific emissions factors applied for NSW and QLD in 1993. Due to the complexity of gas models and limited number of gas samples available at the time, this approach was first implemented as state-based average emissions factors are known as Method 1, under the National Greenhouse and Energy Reporting Scheme. 

Since then, state-based emission factors have been periodically reviewed and regularly increased, to align with a larger sample size and improved scientific understanding of the warming impact of methane on the atmosphere. The NSW state-based emission factor has increased twice, and the emissions factor in Queensland has increased on three occasions.

The most recent emissions factor increase in Queensland last year, was developed after analysing more than 1,000 drill samples from the Queensland Government’s Petroleum Exploration Dataset, selected to exclude samples from current and expanding active coal fields. 

In the late 2000s, the Australian Coal Industry’s Research Program (ACARP) began working on a methodology for developing an approach to estimating fugitive methane emissions that individual companies could implement in a site-specific manner. This site-specific approach was first implemented in 2011, and is known as Method 2, under the National Greenhouse and Energy Reporting Scheme.

Since that time, open-cut mine operators have been able to individually estimate the methane content of their facilities using either a state-based average, or a site-specific estimate based on as few as three borehole samples per mining domain.

In 2024, Ember’s assessment of eight currently operating and two proposed coal mines identified millions of tonnes of CO2-e reductions that had occurred as a result of this accounting shift towards site-specific measurement. Additional research from energy insights firm Reputex has since evaluated the impact of recent accounting shifts on open-cut coal mines across the country. Their findings estimate that recent shifts from state-led emissions factors to company-led estimates have consistently decreased reported fugitive methane emissions reporting by 65 – 70%. This shift has significant implications on a mine’s obligations under the reformed Safeguard Mechanism.

The influence of this reporting shift is especially poignant in NSW. In 2023, the official state-based emissions factor for NSW was 0.061 tonnes of methane per tonne of coal (t CO2-e/t ROM). In Queensland, the equivalent emissions factor was increased in 2023 from 0.023 to 0.031 t CO2-e/t ROM. As such, coal mines in NSW have had a much higher official state-based emissions factor as their respective baseline, and far more coal mines have selectively adopted a company-led, site specific emissions factor. In 2023, The Climate Change Authority estimated that 75% of currently reported coal mine methane emissions from Queensland and 25% from NSW are estimated using this site-specific emissions accounting approach.

In this report, we have utilised the National Greenhouse Accounts, to compare collectively reported fugitive emissions for surface coal mines, against annual coal production estimates, reported at the state level. This allows us to compare an estimate for fugitive emissions intensity across both states, and how it has changed over the last 5 years. To note, this approach would incorporate reported fugitive emissions from facilities utilising both state-based emissions factors, and those utilising site-specific emissions estimates. 

This comparison highlights that fugitive emissions reporting across coal mines in Queensland is largely in line with what would be expected under the state-based emissions factor. In NSW however, where the use of site-specific emissions estimates is far more widespread, we find that the reported fugitive emissions intensity of open-cut mines is six times lower than the state-based emissions factor. It would also be significantly lower than the state-based emissions factor estimate for QLD.

This highlights a clear mismatch between collectively assessed emissions factor averages, compiled by state environmental regulators, and individually reported emissions estimates, compiled by individual mine operators. These results raise the urgent need for in-depth regulatory and methodological review, as highlighted by the The Climate Change Authority in 2023.