Australia faces scrutiny over coal and gas emissions rules

Australia’s coal and gas sectors are facing scrutiny over potential emissions loopholes within the Federal Government’s Safeguard Mechanism. While new industrial facilities must meet strict best-practice emissions benchmarks, expansions of existing operations are often treated as existing facilities, allowing them to bypass the tougher standards required for new developments.

A Climate Council analysis suggests that 22 planned expansions could result in an additional 4.5 million tonnes of carbon dioxide annually by 2035 compared to if they were classified as new projects. The Minerals Council of Australia has resisted calls for uniform standards, arguing that existing infrastructure cannot always adopt the same technologies as new builds.

Adding to the regulatory complexity, a High Court ruling regarding a coal mine expansion in New South Wales has mandated that decision-makers consider Scope 3 emissions. These are the downstream emissions produced when exported coal is burned overseas. This ruling requires authorities to evaluate whether conditions should be imposed to minimize greenhouse gas emissions to the greatest extent practicable, aligning domestic oversight with international frameworks like the Paris Agreement.