This week could mark a pivotal shift in NSW history. Coal has been a literal bedrock of the state’s economy since the 1790s, and the industry has been run almost exclusively by profit motives ever since.
For many communities, this remains an economic lifeline. The industry directly employs close to 23 thousand people, and communities like Singleton and Musselbrook continue to be highly dependent on jobs in the sector. And while royalties don’t flow directly into communities, the industry paid over $4.5 billion dollars in direct state royalties in 2023.
However, the economic boom isn’t as big as many may think.There are at least twice as many nurses and over three times as many public school teachers as there are coal miners in NSW.
The industry sells an incredible amount of coal, but contributes about 3.3% to the state economy’s gross value additions, and direct coal royalties have averaged around 2.4% of the government revenue over the last decade.
And now, as the threat of climate-fuelled wildfires looms in our collective imaginations once again, it seems the expectations for extraction are shifting. So too are our state’s timelines for climate action.
We’re already a month into 2025, and the clock is ticking on the state’s 2030 targets. With a legislated 50% emissions reduction target for 2030, and its 70% goal for 2035, the state is set for rapid changes in the years ahead.
According to the NSW Net Zero Commission, we could be about half way towards the 2030 targets, but it’s clearly concerned that some sectors aren’t pulling their weight. In its annual review, it noted that it was specifically concerned about the “risks to the state’s targets from increased emissions in the resources sector”.
And by that, it means coal mines.
Of the estimated 13.8 million tonnes of CO2-e that the resources sector released in 2022, “ninety-nine per cent” of it came from coal mining – and that’s before any of that coal was even burned.
Once it was, the global climate footprint of the state’s coal was just shy of 450 million tonnes of CO2-e. To put that in context, that’s a bigger global climate impact that year than the greenhouse emissions of France.
For those emissions released at coal mines in NSW, fugitive methane emissions vastly outsize even the emissions of super-sized mining trucks. These greenhouse gasses are released by the very act of digging into coal seams, and cracking open trapped, methane gas.
Currently the NSW government estimates that this might release the equivalent of about 360 thousand tonnes of methane each year. This then converts to 10 million tonnes of carbon dioxide equivalent when you consider its warming over the next century.
But the gas is far more effective at trapping heat in its first decade in the atmosphere, so the 20 year warming effect of all that methane is more like releasing 30 million tonnes of carbon dioxide.
And as I’ve written about before, there’s good evidence to suggest that this number could be far higher.
However, the NSW government now looks to have the coal industry’s methane crisis in its sights.
The NSW EPA has released a new guide for “Large Emitters” across the economy, with the clear expectation that the state’s biggest coal miners will set out “ambitious emissions reductions goals” that align with the state’s climate targets.
Our regulators now have a legal duty to take action on climate change, and it’s clear from this new guide that the government expects far more from the coal industry than just royalties. As the EPA highlights “managing fugitive emissions” from coal mines and gas wells is now “a priority”.
The guide will compel any new facility or modification across NSW emitting over 25 thousand tonnes of additional CO2-e each year to report on their emissions in a standardised manner, and to set goals that align with the NSW Net Zero commitment, and its interim emission reduction targets.
This might not sound like much, but it significantly expands the number of coal mine extensions in NSW that have to report on their emissions, and could be the first time many of these coal mines have to consider onsite reduction goals, not just company wide targets.
The EPA also notes that they “expect proponents of coal mining and gas extraction proposals … to set ambitious emissions reduction goals”.
While this will not force existing coal miners into emissions cuts, and will only encourage emissions cuts on new proposals, it’s still a genuine step towards a more transparent planning process that will enable an honest and open review about not only what sectors of NSW need to do more, but whether or not we can afford new mine expansions.
Already the Net Zero Commission has warned that our emissions roadmap is so narrow, that any new coal mine extensions or expansions “may require other sectors to make greater emissions reductions”.
Thanks to the Large Emitters guide, we might soon know exactly who’s biting off more than we can chew, and be able to have an open discussion about whether it’s all worth it.
One big question is how the coal mining industry responds.
Aside from a pilot project at South32’s Appin Colliery, the industry’s gut reaction to emissions cuts has all too often been to roll out a red carpet of excuses, wrapped up in confidentiality, arguing that material abatement is ‘not technically or commercially feasible’.
But in the four years since the NSW Net Zero Industry and Innovation Program sought to bridge that exact financing challenge, it hasn’t been able to fund a single abatement project on a coal mine in NSW.
This is regardless of the 10 year successful track record that saw 2 million tonnes of CO2-e reduced from the Illawarra’s West Cliff Mine, and three new funding announcements for coal abatement projects in QLD last year alone.
This latest guideline might not sound like much, but it is a critical step forward for the state, and will ensure that if one of our oldest industries wants to expand, its emissions will need to be brought into the spotlight.
I hope it will also shine a light on those miners ready to stand up, and invest in the material emissions reductions needed to maintain a healthy economy in the years to come.
