Is this how a national plan to reduce climate pollution works?
Australian government data released this week shows emissions from Australia’s coal mines rose in the last financial year. Approximately 80% of coal mines were emitting amounts into the atmosphere that exceeded government-imposed limits.
The overall increase is relatively small, about 0.5%. But it comes as the Albanon government is pledging to make major pollution cuts to tackle the climate crisis and meet legally mandated climate targets. This is noteworthy and worth breaking down.
Coal mines are protected by a policy with the daunting name of the Safeguards Authority. Its role is very important. It aims to promote clean practices and emissions reductions at approximately 200 major industrial facilities in the country.
It’s been three years since the Albanon government overhauled its failed coalition plan, with what appears to be drastic cuts each year. Most mines, gas processing facilities, steel mills, smelters, chemical manufacturers and other facilities subject to this regulation aim to reduce their emissions intensity (how much they emit relative to their output) by 4.9% each year.
But the reality is more complicated.
Coal mining is the most obvious example. Total emissions from coal mines were estimated at 31.78 million tonnes last year, up from 31.63 million tonnes. The rise would have been even greater had the Grosvenor mine not been closed due to fire.
Almost two-thirds of the mine released more than the previous year. It happened as emissions limits imposed on mines were lowered. However, 80% of mines were emitting more than the government-imposed target, when in reality they were not meeting the target. They met their obligations by purchasing carbon offsets, which are said to represent emissions reductions made elsewhere.
The advice from scientists and experts is that if allowed to continue, this will not be the solution to climate change. Addressing the climate crisis requires direct emissions reductions as quickly as possible. It primarily means taking immediate steps to reduce fossil fuel usage.
Offsets are justified when no viable alternative yet exists. For example, cement manufacturing and some manufacturing processes that require extreme heat.
The most common form of offsets, carbon credits created by storing carbon dioxide (CO2) in forests and other natural sources, are ultimately needed for “negative emissions,” which release heat-trapping gases already present in the atmosphere. This cannot happen while offsets are used as an excuse to increase the use of fossil fuels.
There are also questions about whether carbon offset systems achieve the scale of emissions reductions claimed. Peer-reviewed research has raised serious questions about the main methods used to create credits in Australia.
Georgina Woods, from campaign group Lock the Gate, said the reliance on offsets was a “serious structural flaw” in the safeguard mechanism. “The Albanon government must correct this slack policy that allows fossil fuel companies to rely heavily on land sector offsets instead of investing in reducing pollution at the source. This is a path to failure,” she says.
“If offsets continue to be used to hide industrial greenhouse gas pollution, Australians will bear the costs through climate-related disasters and rising costs of living.”
This view is supported by several organizations. Kate Dooley, a senior research fellow in the University of Melbourne’s School of Geography, Earth and Atmospheric Sciences, said the reliance on land-based offsets to balance industrial emissions was inconsistent with what scientific research had found was needed and the use of offsets was “delaying true decarbonisation”.
“Australia’s climate goals will only be met by reducing emissions at source and expanding renewable energy, not by temporarily storing carbon on land,” she says.
Climate Change Minister Chris Bowen said that even without offsets, total on-site emissions under the scheme were being reduced. Official data shows a decline of 3.2 million tonnes (2.3%) this year.
But there are wrinkles. Last year, 11 fewer industrial facilities were eligible for the scheme compared to 2023-2024.
why? Only locations that emit more than 100,000 tons of CO2 per year are included. Mines and factories that fall below that threshold are reducing their pollution, but unless they reach zero, they continue to emit emissions that are not counted here.
So, although a direct comparison is not immediately possible, the comparable direct reduction was probably less than 2%.
When offsets are included, the reduction is even larger, at about 5.5%, or 7 million tonnes. Mining company Rio Tinto and gas producer Woodside bought more than a million carbon credits last year to offset climate pollution, likely at a cost of about $40 million each.
The good thing about this is that companies have to pay a carbon price for some of their harmful pollution. If that amount increases, it could act as a deterrent and, for some, an incentive to reduce emissions directly. The situation is better than under the Coalition government, when major emitters received almost no fines. But for now, it’s a relatively small cost for multinational companies.
Climate consultancy Reputex found that large-scale decarbonization efforts have yet to be implemented at scale among companies under safeguards due to long lead times and high costs of clean solutions in some industries. He expects the situation to change this year, especially as off-grid mines invest in renewable energy and electrical machinery.
While that is clearly a positive thing, it does not address fundamental questions about institutional design. Some major coal mines, including Adani’s Carmichael mine and Glencore’s Hale Creek mine, received millions of dollars worth of carbon credits last year for keeping emissions below government limits called baselines.
In the case of the Carmichael Mine, this happened despite an increase in pollution compared to the previous year. Its emissions were much lower than a baseline calculated using a formula that takes into account both the history of the mine and the average emissions across the industry.
The Albanon government has not yet said whether it sees this as a problem. Returning to the question I raised at the beginning: teeth How the system is designed to work.
Mr Bowen said the data showed the safeguards were “good policy and working well”, providing industry with investment certainty to “enable our operations to continue to operate” while reducing overall emissions.
Not all government agencies agree. The Net Zero Commission, which advises the New South Wales government, warned in December that the scheme was unlikely to drive on-site reductions at coal mines with the urgency needed to meet statutory climate targets, partly because there is no limit to the number of carbon credits companies can buy.
A review of the system is due to begin in July, but could be delayed due to the fuel crisis. There is hope among some people working in the field that the response will be relatively light. The evidence suggests that further consideration is needed.
