The Institute for Energy Economics and Financial Analysis (IEEFA) reveals government carbon credit reforms could potentially boost Australia’s climate ambitions in the coal sector.
A report by the Emissions Reduction Assurance Committee (ERAC) confirms the integrity of carbon credits earned through the Australian Carbon Credit Unit (ACCU) scheme from converting coal mine waste gas into electricity.
This method offers a practical pathway for real emissions reductions along with the Safeguard Mechanism (SGM), and coincides with new grant funding to decarbonise coalmines in New South Wales and Queensland, totalling $305 million and $520 million, respectively.
SGM data has highlighted priorities to improve the National Greenhouse and Energy Reporting (NGER) scheme, the ACCU scheme, and the Safeguard Mechanism to incentivise emissions reductions in the sector.
Under the NGER scheme, urgent improvements are required to methane measurements, reporting, and verification methods for open-cut coalmines.
As part of the ACCU scheme, SGM says a remake of the scheme is required for the coalmine waste gas method, as well as the implementation of the recommendations of the ERAC report.
Meanwhile, SGM needs an improved clarity published around permitting the adjustment of emissions baselines for SGM facilities. In conjunction, SGM data highlights the need for rebalancing the emissions reductions requirements for different mine types, as well as placing limits on the use
IEEFA says without these changes there is limited financial incentive for open-cut coalmines, which currently accounts for 80% of Australian coal production, to control methane emissions.
“This creates a significant risk that their emissions will remain unmeasured and unreported unless NGER measurement standards are updated,” IEEFA says.
According to the IEEFA, Australia would potentially have to make faster and deeper cuts in emissions to account for the expansion and extensions of unabated coal mines according to analysis undertaken by the IEEFA.
“The opportunity to capture and utilise methane that could relieve pressure from domestic gas supplies would be lost,” the institute says.
The Institute for Energy Economics and Financial Analysis examines issues related to energy markets, trends, and policies. IEEFA’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.
Write to Aaliyah Rogan at Mining.com.au
Images: Unsplash
