NSW Coal Expansions Threaten Net Zero Targets, Commission Warns

Takeaways

• A new Net Zero Commission report says NSW cannot meet its net zero targets if coal mine expansions continue.
• Fugitive methane emissions are rising sharply, with 18 new coal expansions threatening the state’s climate goals.
• The commission calls for stronger regulation, enforceable emissions limits, and a planned transition for coal-dependent regions.

New South Wales risks missing its legislated net zero targets as a fresh warning from the state’s Net Zero Commission finds that ongoing NSW coal expansions are “not consistent” with achieving long-term climate goals.

In its Coal Mining Emissions Spotlight Report, the commission urges the government to consider greenhouse gases “in all planning decisions, including those for additional coal mining”. The report highlights that fugitive methane emissions, which make up 96 per cent of the resources sector’s pollution, are projected to jump nearly 50 per cent by 2026–27 if proposed coal projects move ahead.

The commission, established to guide the state’s path to net zero, says NSW is currently off track for its 2030 and 2035 targets. It stresses that continued coal mining emissions from mine extensions directly undermine the Climate Change Act and the Paris Agreement.

According to advocacy group Lock the Gate, 18 coal mine expansions are now being assessed in NSW. Climate Change Minister Penny Sharpe said the government would weigh the commission’s recommendations “along with advice from other groups and agencies”.

Read More: Return of Coal a Threat to European Companies’ ESG Ratings

While emissions from the coal sector have fallen more than 40 per cent since 2004–05, the report notes the drop is largely due to mine closures, not meaningful action to reduce methane at active operations. Only three coal mines in NSW currently operate under enforceable emissions caps.

Methane, a potent heat-trapping gas with a warming impact 30 times greater than carbon dioxide, accounts for 91 per cent of fugitive methane emissions from coal mining. Just five underground mines are responsible for 44 per cent of the state’s total fugitive emissions.

The commission says stronger regulation is needed, warning that voluntary management plans lack ambition, clear targets, and enforceability. It calls for closer cooperation between agencies, including the Environment Protection Authority, to ensure mine operators adopt proven abatement technologies.

The report also highlights the influence of Scope 3 emissions, which arise when exported coal is burned overseas. As 87 per cent of NSW coal is exported, the report notes that these indirect emissions, though counted internationally, drive climate instability that affects NSW communities.

The state’s coal sector earned $33.1 billion in export revenue in 2023–24 but now faces growing market risk as major customers commit to net zero. Federal Treasury modelling projects national coal output could fall by up to 51 per cent by 2035.

Net Zero Commission chair Nick Rowley said NSW must prepare for the long-term decline of coal. “Given global demand for thermal coal is likely to decline, we owe it to those communities to plan for a just transition,” he said.

Also Read: Britain Approves New Coal Mine Despite Climate Target

Recent court rulings have also complicated the future of NSW coal. Last month, the Land and Environment Court cancelled the approval for an extension of the Ulan thermal coal mine on climate grounds. This followed a Court of Appeal decision overturning the approval of MACH Energy’s Mount Pleasant mine, a case now headed to the High Court.

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Source: The Sydney Morning Herald