“Largest climate policy failure:” Giant NSW coal mine extension approved, with conditions attached

NSW’s Independent Planning Commission has granted approval for the giant Hunter Valley Operations coal mine extension, locking in emissions that opponents decried as a “carbon bomb.”

The IPC verdict, announced on Wednesday, confirms last week’s Renew Economy report that NSW’s present policies gave the commission little scope to reject plans by HVO’s owners, Glencore and Yancoal, to continue operations.

The IPC, though, set conditions on the expansion, the largest in NSW’s history. These included the use of renewables at the mine itself, buying offsets, and doing sales deals in jurisdictions making efforts on climate change “consistent with the Paris agreement.”

But the approval was immediately slammed by environmental groups, who pointed out that approving more coal mines is not consistent with the Paris climate treaty. “The approval of the HVO Extension is the largest climate policy failure in NSW history,” said Campbell Knox, a Newcastle resident and spokesperson for Rising Tide.

HVO had been seeking to extend the mostly thermal coal mine by 19 years, out to 2045, and the IPC granted that period. Thermal coal is burned to generate electricity, while 20% or less of the output will be used as “semi-soft” coking coal in steelmaking.

“In balancing these impacts against the significant employment, business, social and economic benefits of the mine extension, the Commission has imposed conditions that effectively manage the greenhouse gas impacts of the Project within the parameters of the NSW and Commonwealth statutory and policy regimes, and the international Paris Agreement,” the IPC said in a statement.

As proposed, HVO’s plan would extract 429 million tonnes of coal. When burnt, the fossil fuel will cause emissions of about 809 million tonnes of carbon dioxide equivalent – or about seven times NSW’s present annual carbon pollution – according the NSW government’s assessment report.

About 98% of those emissions would be so-called scope 3, associated with the transport and combustion of the fuel by end users. Most of the customers were expected to based overseas, so that carbon pollution would technically not sit on Australia’s – or NSW’s – accounts.

The climate impacts of combusting that coal may be easier to quantify following the release this week of a Carbon Impacts Tracer online tool.

As Renew Economy reported, the tool allows everyone from students to lawyers and even coal miners to trace a “pit-to-peril” link between new coal, gas and oil projects to their resulting contribution to global warming, and on to eight selected impacts.

In its “statement of reasons” for the approval, the three-person IPC panel said it had sought advice from the NSW government on “the workability, enforceability and potential unintended consequences of a condition requiring a Scope 3 Management Plan”.

Scope 3 emissions – which cover an estimated 98% of the projected total – encompass the “downstream” carbon pollution from shipping and combusting the fossil fuel.

“The Commission’s proposed condition would, after a transitional period, have limited the export of Project coal to jurisdictions that were party to the Paris Agreement that were complying with their applicable GHG targets, regulations and policies, including their current [nationally determined contributions] where applicable,” the report said.

The IPC said the condition was intended, in part, to respond to the purpose stated in section 3 of NSW’s Climate Change Act, and the statement in the Coal Policy.

Specifically, the act states that: “NSW will continue to supply high-quality thermal and metallurgical coal to our trading partners, ensuring that producers continue to honour their export commitments and retaining our role as a trusted and reliable supplier as our partners meet their net zero commitments,” the IPC noted.

Other conditions include the HVO owners must “within six months” prepare and publish a Greenhouse Gas Mitigation Plan in consultation with the NSW Environment Protection Authority that “transparently demonstrates how it is reducing and/or offsetting” the emissions directly generated by the extension. These scope 1 emissions include fugitive emissions from the mine’s operation.

HVO must also reduce Scope 2 emissions from purchased electricity, the report said. “Consistent with requirements for new data centres, the Applicant is required to take reasonable and feasible
measures to maximise the use of renewable energy for the development within four years of commencement,” the IPC said in an accompanying statement.

Georgina Woods, Lock the Gate Alliance’s National Coordinator, said her organisation was “shaken
and shocked by this decision, which will go down in history as an infamous betrayal of the
public trust”.

“Climate change is already increasing floods and fires in the Hunter, and driving up the cost of living for everyday Australians,” Woods said. “It is a deadly threat and the NSW planning system is making it worse.”

“Dozens of people from the Hunter and other regions stoically fronted public hearings to
share heart-rending personal stories of how climate change is already affecting their lives,
including rural firefighters, wildlife carers, and households grappling with rising damage
costs,” she said.

Sue Higginson, the NSW Greens spokesperson for Climate Change and Planning, said she couldn’t believe the IPC hadn’t followed through with shortening the mine’s extension to avoid some of the greenhouse emissions.

“There is an enormous question mark over the legality of this decision,” said Higginson, a former environmental lawyer. “It flies in the face of our legal and policy frameworks. I wouldn’t be surprised if the decision is challenged in the courts.”

“This is a failure of Labor. They cannot keep approving enormous coal expansions and pretend it is taking the climate crisis seriously,” she said. “The science, the state’s own climate laws and its independent Net Zero Commission are all pointing in the other direction.”

Renew Economy approached the Minns government and HVO for comment.

Among the reasons the IPC cited for granting the approval of the extension were its “substantial economic benefits to the Hunter region and NSW through ongoing employment, expenditure on local goods and services, royalties, taxation revenue and export income”.

It cited NSW government figures stating HVO’s existing operations account for almost 10% of direct
employment in the local mining industry.

“The Project’s operational workforce is projected to peak at 1,407 full time equivalent (FTE) jobs in 2034 across HVO North and HVO South, with an average of 1,311 FTE jobs over the life of the Project excluding on-site contractors,” the IPC said.

A separate citation stated coal mining in the Hunter region as providing approximately 14,437 direct jobs.

The IPC also cited estimates that the project would generate a net benefit of approximately $5.69 billion for NSW. This total included royalties for the state of $2.19b, in net present value terms.

• In tallying the costs from the extension, the IPC cited an indirect impost of $91.4m NPV, mostly in “biodiversity and other mitigation offset costs”.
  
  The different estimates, however, did not capture the cost of the impacts “associated with Scope 3 emissions”, the IPC said.

As for the quantum of the actual scope 1 emissions of the HVO extension, the numbers used by the IPC and the NSW government themselves may also end up being reviewed – if the findings of separate research are taken into account.

As Renew Economy reported last week, the federal government earlier this month released an interim report by an expert panel into “enhancing Australia’s fugitive methane emissions estimates”.

The panel, led by former Chief Scientist Cathy Foley, is examining how the use of satellites, aircraft and other “top-down” technologies might provide a more accurate reading of how much of the potent greenhouse gas might be escaping from coal mines and gas fields.

“New atmospheric measurement (‘top-down’) approaches may improve how Australia estimates fugitive methane emissions,” the report stated, noting that “[c]utting methane emissions can help slow climate change in the near term”.