Emissions accounting variability

Satellite analysis shows a notable difference from company-led estimates

Satellite emissions estimates indicate an increase in fugitive emissions from open-cut coal mining, contrasting with a decline in officially reported company-led emissions estimates.

Open-cut coal mines in Australia do not measure their fugitive methane emissions. Instead, their emissions estimates are modelled on bore-hole coal samples to derive a fugitive emissions factor that is then multiplied by annual coal production. Due to the complexity and variability of gas sampling, this approach was first developed at the state level in 1991, with specific emissions factors applied for New South Wales (NSW) and Queensland in 1993. These state-based emissions factors are known as Method 1, under the National Greenhouse and Energy Reporting Scheme, and have been periodically reviewed, to align with a larger sample size and improved scientific understanding of the warming impact of methane on the atmosphere. 

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 owners have been able to individually choose to estimate the methane content of their facilities using pre-existing state-based averages, or to individually collect as few as three borehole samples from their own mine, and develop a facility-level 3D model to estimate emissions during production. 

In 2023, the Climate Change Authority estimated that 75% of currently reported coal mine methane emissions from open cut coal mines in NSW currently utilise Method 2. In contrast, only 25% of fugitive emissions from open cut coal mines in Queensland were estimated to be using Method 2. 

Earlier this year, Ember’s assessment of company-led methane estimates highlighted that the shift from state-based to site-specific emissions estimates has consequentially seen a significant reduction in officially reported emissions among the vast majority of mines utilising this methodology. This builds on research from energy insights firm Reputex, which estimates that the shift towards company-led estimates has consistently decreased reported fugitive methane emissions reporting by 65–70%.

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 carbon dioxide equivalent 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 open-cut coal mines in NSW were quantified using this site-specific approach known as Method 2. In Queensland, with a state-based emissions factor that has only recently risen to half the level of NSW, only 25% of all open-cut fugitive emissions are estimated to have been quantified using Method 2.

In this study, we sought to identify the potential implications of shifting away from state-based emissions factors in NSW by reconstructing the estimated fugitive emissions from open-cut mines and comparing them to our satellite estimates. To do so, we multiplied the state’s open-cut coal production by the state-based emissions factor for fugitive emissions, and added this to the officially recorded fugitive emissions from underground coal mines in 2020 and 2021. We then compared this adjusted emissions inventory to the official emissions inventory for all coal mines, and our satellite emissions estimate below.

The result of this reconstruction indicates that our satellite emissions estimates, covering only 60% to 64% of NSW’s coal production, have identified fugitive emissions 90% greater in 2020 and 107% higher than reported emissions in 2021. This shows a closer correlation to total estimated emissions from our adjusted Method 1 inventory reconstruction in both years, however, this reconstruction represents potential fugitive emissions from all coal mines across the state, not just those within our satellite study area.

This site-specific approach has now been made compulsory for open-cut mines under the Safeguard Mechanism producing more than 10 million tonnes per year, and will become industry standard in 2026 for all Safeguard reporting coal mines. It is currently under federal review “to ensure the method remains fit for purpose”. The review is expected to reach its conclusion later this year.