In 2024, Australia’s coking coal mines emitted an estimated 867 kt (kilotonnes) of methane – about two times more than the country’s entire oil and gas sector. With some mines releasing more methane than others, the IEA estimates that Australian coal adds on average 17% to steel’s short-term climate impact, but underreported data may be hiding even greater risks.
Australia is the world’s largest exporter of coking coal, mostly to steel-producing economies. The average reported and estimated methane intensities of mining this coal are between 3-5 tonnes per kilotonne of coal. These extraction-related emissions of Australia’s coal could add 10-17% to the short-term climate impact of steel – an issue that can only be addressed at the mine level.
Yet, the country’s persistent underreporting of coal mine methane emissions – repeatedly shown by independent studies – could mislead steelmakers who may be importing coal, the mining of which is responsible for up to three times more methane emissions than reported, making it harder to manage and reduce lifecycle emissions.
Methane emissions from metallurgical coal extraction fall under steelmakers’ value chain emissions (Scope 3 Category 1 – Purchased Goods and Services), but are rarely reported. Ember’s analysis found that, when estimated coal mine methane emissions from Australia were added, ArcelorMittal, Nippon Steel and POSCO’s Scope 3 emissions would increase by between 6% and 15%.
Using seaborne trade data, Ember’s case study found that, between 2023 and 2024, around 4.3 Mt (million tonnes) of coal from “super emitter” Hail Creek was shipped to major steel plants owned by ArcelorMittal, Nippon Steel and POSCO. The mining of this amount of coal was reportedly responsible for around 12.9 kt of methane emissions, with an additional 27.6 kt believed to be unaccounted for due to the operator’s underreporting. This unreported amount is equivalent to the methane emissions of about 283,000 beef cattle in one year.
Coal production releases methane during mining, but it is the steel industry’s coal demand that drives these emissions. As the main buyer of coking coal, the steel industry’s ambition to decarbonise could encourage suppliers to adopt direct measurement, transparent reporting and on-site abatement of fugitive methane.
In the short term, ahead of 2030, Ember recommends regulators and policymakers around the world to prioritise including coal mine methane emissions in policy instruments targeting steel.
Steelmakers, on the other hand, should set ambitious targets for managing fugitive methane emissions from upstream coal extraction. Given over half of coal mine methane emissions are avoidable using existing technologies, this is a good – and critical – starting point for steelmakers to begin reporting and reducing their value chain emissions. It also helps steelmakers to mitigate risks in their supply chains.
Looking to 2050 net zero targets, the shift to renewable-powered iron and steel production remains the ultimate decarbonisation pathway. Policymakers, steelmakers and relevant stakeholders need to work together to deliver this transition.
