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Australian coal miners are gearing up for a battle over emissions limits as the government proposes using "industry averages" to determine the restrictions.
This policy could have significant consequences for underground coking coal mines, which typically have higher methane emissions and might be disproportionately impacted by the regulations.
BHP, a prominent mining company, is urging the Albanese government to recognize coking coal miners as a distinct industry separate from thermal coal miners. However, other coal producers argue that it is more crucial to differentiate between underground and surface mines.
This drive to factionalize the Australian coal sector stems from a government initiative that aims to link the greenhouse gas limits of the nation's largest emitters to the average emissions of their industry peers.
While the concept of using "industry averages" to determine emissions limits by 2030 is intended to favor the cleanest producers within a specific industry, many major miners contend that applying this approach to the coal sector could result in unintended consequences.
Underground coal miners, who often specialize in coking coal production, face unique challenges due to their operations taking place in deeper geology with higher methane gas content compared to open-pit mines. Consequently, adopting a single "industry average" for all coal mines could disproportionately affect underground coking coal mines with the highest carbon footprints.
Centennial Coal, Whitehaven Coal, and Malabar Resources have called on the government to focus on distinguishing between underground and open-pit mines, rather than solely differentiating between coking coal and thermal coal.
While implementing a uniform "industry average" for emissions limits would pose challenges for the highest-emitting mines, it would also alleviate the burden on mines with lower emissions.
According to Dan van der Westhuizen, CEO of Anglo American in Australia, the government should establish a system that incentivizes all participants to reduce emissions, not just those with the largest carbon footprint.
He suggested a possible solution could be a tiered system with three categories based on gas content—low, mid, and high—which would narrow the range and motivate everyone to make incremental improvements from their current positions.
(Writing by Alex Guo Editing by Harry Huo)
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