An Australian mining company was able to massively increase greenhouse gas emissions from two of its coalmines without penalty under a government policy that is meant to limit carbon pollution from large facilities.
Centennial Coal was given permission on three occasions since 2016/17 to increase the greenhouse gas emissions from its Myuna colliery and Mandalong mines in New South Wales, according to data kept by the clean energy regulator.
The increases were approved under the government’s safeguard mechanism, which is supposed to ensure that emissions cuts paid for by taxpayers through its emissions reduction fund – now called the climate solutions fund – are not wiped out by rising emissions elsewhere.
The safeguard mechanism sets pollution limits for large emitters such as mines and power plants.
If a company exceeds this pollution baseline, it is required to purchase carbon credits to offset the increase, or pay a penalty. However, the government’s policy allows companies to apply to increase their emissions baselines under certain conditions, thus allowing them to increase their overall total emissions.
The Australian Conservation Foundation (ACF), which analysed emissions data for Centennial Coal published by the clean energy regulator, says flaws in the safeguard policy meant Centennial avoided having to buy about $8.3m in carbon offset credits, or pay an alternative penalty or implement stronger measures to cut their pollution.
The ACF’s analysis found that in 2017-18, Centennial’s Myuna mine overshot its baseline of 402,028 tonnes by 65% – emitting a total of 664,956 tonnes – but it avoided penalty after having its baseline increased by the clean energy regulator.
The mine’s total emissions were more than double its reported emissions for the previous year.
It was also granted two baseline increases for its Mandalong mine, one in 2016/17 and one in 2017/18, for more than 300,000 tonnes in excess emissions.
In 2016/17, Centennial reported emissions of 1,560,761 tonnes of carbon at Mandalong, exceeding their reported baseline of 1,508,644 by 3.8%.
In 2017/18 the mine was granted another baseline increase and reported total emissions of 1,866,089 tonnes.
Gavan McFadzean, the ACF’s climate and energy program manager, said the data highlighted the failure of the safeguards policy to effectively cap pollution from large emitters.
“The fact that Centennial haven’t done anything legally wrong is the problem,” he said.
“These are huge overshoots in emissions which are done really with impunity by the industrial and mining sectors in the full knowledge that the Morrison government will give them a free pass on whatever emissions of CO2 or methane they pump out into the atmosphere above their baseline.”
Australia’s emissions have continued to rise, despite the Morrison government’s claims it is taking action to address the climate crisis.
The government’s most recent quarterly greenhouse data showed fugitive emissions produced during the extraction of fossil fuels were up by 5.9%.
Centennial is not the only company to have been granted baseline increases under the safeguard mechanism. Mining company Anglo American nearly doubled its greenhouse gas emissions in two years at its Moranbah North mine in central Queensland without penalty.
McFadzean said the rise in pollution from companies such as Centennial and Anglo American was “swamping” the abatement purchased with public money through the climate solutions fund or the reductions coming from the Renewable Energy Target.
“As a first step, the government must close the loopholes Centennial has exploited and tighten safeguard pollution caps over time, as recommended by the Climate Change Authority,” he said.
“This is a bare minimum first step towards a comprehensive Australian climate change strategy that must bring down our pollution to zero by 2050 from all sectors of our economy including heavy industry, transport, energy and the land.”
Katie Brassil, Centennial’s company spokesperson, said there were provisions in the legislation that allowed companies to increase their emissions in certain circumstances.
“Both Mandalong and Myuna met these provisions,” she said.
Brassil said the company was able to seek a baseline increase at Mandalong due to changes in the natural deposit that meant there was an increase in emissions of fugitive gas.
In the case of the Myuna mine, the company was able to increase its baseline because it could demonstrate that its production – and therefore total emissions – had risen but it had reduced the mine’s emissions intensity per tonne of coal.
“Centennial is due to lodge its NGER’s (National Greenhouse and Energy Reporting) return for 18/19 and we anticipate a reduction in Mandalong’s emissions and again reduced emissions intensity for Myuna for the period,” she said.
Guardian Australia has put questions to the energy and emissions reduction minister, Angus Taylor.