New Report: coal and gas emissions “set to soar” under Safeguard Mechanism

by Callum Foote | Feb 27, 2023 | Energy & Environment, Latest Posts

The government has “significantly underestimated” coal and gas emissions in its Safeguard Mechanism to curb big carbon polluters, according to new analysis by Climate Analytics. Callum Foote reports.

A new report by Climate Analytics has found that emissions from the LNG and coal industries in Australia would continue to increase by 2030, not fall, and this would be driven by the unlimited availability of cheap carbon offsets. There is a significant chance this availability would also enable new gas and coal developments which do not presently exist.

“The government appears to have significantly underestimated the likely emissions from LNG and coal by 2030, and our projections show these are set to soar,” said Bill Hare, CEO of Climate Analytics.

Because the government has set no limit on the amount of carbon offsets industry is allowed to use, there will be a free-for-all for these credits by the LNG and coal industry.

“The Safeguard Mechanism (SGM) will therefore not work to drive emissions down as it’s supposed to, particularly given the integrity issues found to be widespread within Australia’s offset scheme by independent experts.”

The government’s projected emissions for the LNG industry shows only a 20% rise by 2030. But the Climate Analytics figures based on a detailed bottom-up analysis show an increase of 36% from 2021 levels by 2030. For coal mine emissions, the government projects a 10% decline in emissions by 2030, but the Climate Analytics figures show a rise of between 23% to 116% over the same period.

Coal and LNG impact on SGM

Source: Climate Analytics

The report found that even the lowest scenario for pollution, requiring 73 million tonnes of offsets, is almost double the government’s projected 20% of Australian Carbon Credit Units (ACCUs) required by all SGM facilities in 2030, if extrapolated across the entire duration of the scheme. The worst case, requiring 259 million tonnes of offsets, is double the entire number of ACCUs generated to date.

The government’s carbon offset scheme has already been found to rely on faulty assumptions to the benefit of the fossil fuel industry.

“Brazenly co-opted”: experts confront CSIRO for gas industry infiltration, greenwashing fossil fuels

According to Polly Hemming, the acting director of Climate & Energy at The Australia Institute (TAI):

Whether you believe offsetting is a legitimate premise, it is clear that the entire concept is not being used as a temporary measure by industry while it decarbonises. It is being used as a way to lock in fossil fuel production.

Additionally, a lack of transparency makes it impossible for researchers to figure out how the government came to its projections.

“The government projections are a black box” says Climate Analytics’ report author Ryan Wilson. “The main difference between our numbers and governments numbers around coal, future coal emissions, and that’s born out of basically a complete lack of transparency” he says.

While the Department of Energy do release methodology documents with their projections, Wilson has found that “what they write doesn’t really match up with the figures that they’re using.”

For example, the projections that underpin the government’s proposed Safeguard Mechanism, reference resource energy quarterly reports from March and June last year, which showed increasing coal production, both metallurgical and thermal, out to 2027.

Beyond that, Wilson says “they’ve referenced this Wood McKinsey Report, from which they don’t give us any information or methodologies. We are just expected to trust them, I guess.” Wood McKenzie is a research firm servicing the resources and oil and gas industries.

Even a cursory analysis of the government’s assumptions reveals a lack of logic according to Wilson “if the government is saying production and exports are both increasing, how can coal emissions be declining by 10%?”

Even basic details like the list of mines that the government assumes to be opening are omitted from the methodology disclosures.

Map of Australian coal mines and basins

Soiurce: Climate Analytics

A 2017 auditor general review of the government’s accounting and reporting of greenhouse gas emissions estimates and projections recommended far higher levels of methodological transparency.

Specifically, the government was asked to “expand its release of emissions projections information to include key data inputs, assumptions, formulas and methods sufficient to enable users to recalculate emissions projections within a reasonable degree of precision.”

While the government agreed to the recommendations, they have not yet been actioned.

The Minister for the Environment and the Department of Environment have both been asked by MWM whether the current government will act on this recommendation. Neither have provided a response.

Callum Foote was a reporter for Michael West Media for four years.

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