Coal mine methane is a big problem for Australia, but technology exists to help cut it

Last year, my team set out to answer a specific question: what actions – if any – could the New South Wales and Queensland governments take to complement the Safeguard Mechanism and accelerate coal mine methane abatement within their own state inventories?

We’ve just published a 140-page report with the answer. The short version: a set of scalable, self-funding policy measures could cut fugitive emissions from coal mines in NSW and QLD by around half – at less than $30 per tonne of CO2e – with low to negative net cost to industry.

You may be asking: If it’s really so cheap, why wouldn’t this abatement happen under the Safeguard? What technologies are you talking about? Given the national policy framework, why would the states get involved?

All good questions. Answers in reverse order are:

– As a national policy, the safeguard aims to reduce national net emissions for covered sectors on the Australian government’s timelines to 2050. Accordingly, it allows emitters to count abatement using state and industry agnostic ACCUs or SMCs. Whereas, to meet their legislated net zero targets NSW and Queensland need abatement to happen within their inventories, and on faster timelines than the Safeguard.

NSW’s Net Zero Commission recently singled out coal mine methane as a key risk and recommended new policy action. Queensland has already launched the $520 million Low Emissions Investment Partnerships (LEIP) program to reduce emissions from metallurgical coal facilities covered by the Safeguard.

– Our report focuses on commercially available technologies. Two that stand out are Regenerative Thermal Oxidisers (RTOs) and enhanced methane drainage. RTOs oxidise ventilation air methane (VAM) – already vented from underground mines for safety reasons – at concentrations between 0.2% and 1.2%, which applies to many (though not all) underground mines.

Open-cut and underground mines can also pre-drain methane from gassy seams using methods similar to coal seam gas extraction, then either flare or use it (e.g. for onsite power). Many claim pre-drainage isn’t commercially viable, but this usually assumes the gas must be extracted, processed, and sold at a profit. If viability means oxidising it on site for less than ACCUs/SMCs, evidence suggests it’s feasible for the gassiest seams with a year or two of planning before mining. 

– We modelled a range of costs using data from sources including Rystad, CSRIO and UN Economic Commission for Europe. Costs vary by mine and assumptions, but the trend is clear: the more methane a mine emits, the cheaper it becomes to abate per tonne of emissions. Across the board, there’s significant opportunity below $30/tCO₂e.

Still, the barriers to deployment are real. One is opportunity cost. A $40 carbon price could earn a mine ~$2.30 per tonne of coal from selling surplus SMCs. However, that same capital, if invested in expanding production or acquisitions, could yield ~$33 per tonne – using long-term averages. Another issue is timing: these cost estimates reflect mature markets. Early adopters will face higher initial costs and complexity as they help build the regulatory and supply chain pathways others will follow.

So, back to what we found… We drew on more than 80 interviews and workshops with government teams, NGOs, researchers, consultants, technologists, and mining service providers to understand the opportunities and barriers – and to co-design a set of practical, complementary policy measures to address them:

– A methane abatement fund in NSW (Queensland already has the LEIP), to help first movers manage elevated upfront costs. The wider industry ultimately benefits from proven, lower-cost technology.

– Regulated emissions intensity thresholds, requiring mines to cut emissions below set targets – creating policy certainty and unlocking cost-effective abatement.

– A state-wide methane measurement network to drive best practice and independently verify the impact of public and private investment.

We estimate about 5.1 MtCO2e per year of cost-effective abatement in NSW and 5.5 MtCO2e in Queensland – all under $30/tCO2e. This comes from deploying existing technologies at just 15 large underground mines – nine in NSW, six in Queensland – which together account for 63% of fugitive emissions but only 12% of coal output.

We then modelled different combinations of policy measures using cost-benefit analysis. The goal wasn’t to produce a prescriptive blueprint – economics are only one part of sound policy. Instead, our analysis is a tool: it helps governments narrow their focus to cost-effective options that can be assessed against broader criteria. Within that frame, policymakers retain flexibility to tailor measures to local needs, industry structure, and strategic priorities.

Coal mine methane isn’t an easy problem – but it’s not an intractable one either. The technology exists. The costs are modest. And the emissions are concentrated. With the right supporting frameworks, states can complement the Safeguard and make real, near-term progress toward their climate targets.

Henry Adams is co-founder and director at Common Capital: a public benefit focussed, specialist climate, energy, policy and economics firm. Henry has worked in and for state and national governments on climate, energy and environmental policy since 2005, in policy maker, ministerial advisor and consulting roles.