NSW’s Environmental Protection Authority is introducing tougher limits on methane and diesel emissions from industry, aiming to close an emissions shortfall before 2030. Major players in the energy and mining sectors argue the move might undermine their role in the national energy transition.
The state is pursuing aggressive carbon reduction targets with a goal of cutting emissions by 50% from 2005 levels by 2030 and reaching net zero by 2050. However, current forecasts suggest NSW may fall short without significant intervention. As a result, new rules will apply to major polluters, including coalmines and heavy industry facilities emitting over 25,000 tonnes of carbon dioxide each year.
This policy shift comes as the federal government faces mounting pressure to toughen the Safeguard Mechanism, which currently requires major industrial emitters to reduce their emissions by 4.9% annually until 2030. However, analysts warn that this may not be enough. Federal officials are expected to revise the system to support a national reduction target of 62 to 70% by 2035. Industry groups argue that overlapping policies may lead to conflicting demands and inefficiencies. They say federal policies should take precedence to reduce regulatory duplication.
The potential for tension between state and federal approaches is particularly significant for coalmines, which account for about 9% of NSW’s direct greenhouse emissions. Many of these sites still use diesel and emit significant methane. The EPA’s new rules will require rapid emission cuts, though industry groups are pushing for exemptions to avoid unintended damage. These exemptions would still require compliance but allow some alignment with federal safeguards.
Electricity providers have also raised alarms. AGL Energy, operator of the Bayswater coal-fired power plant scheduled for closure in 2033, warns that strict limits on coal plant emissions could complicate the energy transition. The company says temporary reliance on these plants may be necessary to ensure stable electricity supply as renewables ramp up.
Recent satellite data suggests Australia's real methane emissions may be far greater than previously reported, especially from NSW and Queensland coal regions. This raises further concern about the accuracy of existing datasets and Australia’s ability to meet international climate targets.
If the emission reporting system were updated to reflect the latest scientific measurements, experts estimate methane emissions from coalmines alone could rise by up to 22 million tonnes. This would exceed the limits of current climate policy tools and could prompt the need for major regulatory changes.
