Coal mine waste gas

Closed 12 Mar 2019

Opened 12 Mar 2019

Published Responses

View submitted responses where consent has been given to publish the response.

Overview

The climate change function transferred to our department from the Department of the Environment and Energy on 1 February 2020.

Finalised method determination

The Carbon Credits (Carbon Farming Initiative—Coal Mine Waste Gas) Methodology Determination 2015 was made on 13 February 2015 and varied on 7 November 2016. A minor variation was made on 12 March 2019.

About this method

The Coal Mine Waste Gas Determination supports projects that destroy the methane component of coal mine waste gas to carbon dioxide by using flares, electricity production devices or flameless oxidation devices (such as ventilation air methane oxidation devices).

Who could benefit?

This method could benefit:

  • companies specialising in flaring or electricity generation systems
  • companies specialising in managing ventilation air methane
  • owners or operators of underground coal mines.

How does it work?

Methane is a potent greenhouse gas which contributes to climate change. Methane is produced when underground plant matter is turned into coal. During coal mining, the trapped methane (mixed with other gases) is released into the mine and atmosphere. This gas mixture is referred to as coal mine waste gas. It can often be collected and combusted by flares and electricity production devices.

A large proportion of coal mine waste gas is extracted from the mine in ventilation air shafts. The methane in this coal mine waste gas is called ventilation air methane and is heavily diluted. This makes it difficult to combust using flares or to produce electricity, but it can be treated using flameless oxidation devices.

When methane is combusted by flares and/or electricity production devices, or treated by flameless oxidation devices, it is converted to carbon dioxide. The produced carbon dioxide emissions have a lower impact on global warming than the impact that would have occurred from direct release of the methane emissions.

If a project produces electricity from the coal mine waste gas, credits may be given if this electricity displaces a more carbon-intensive source of electricity (such as from the grid).

There are six types of projects under the method. All must be undertaken at operating underground coal mines:

  1. New flaring or flameless oxidation projects: involves installing flaring or flameless oxidation devices at a coal mine where coal mine waste gas has not previously been converted. Credits are given for the methane converted using the flares and flameless oxidation devices.
  2. Expansion flaring or flameless oxidation projects: involves installing flaring or flameless oxidation devices at a coal mine where coal mine waste gas is currently or has previously been converted. Credits are given for the extra methane converted by the newly installed flaring or flameless oxidation devices.
  3. New electricity production projects: involvesinstalling electricity production devices at a coal mine where coal mine waste gas has not previously been converted. Credits are given for the methane treated using electricity production devices, as well as any flares and flameless oxidation devices that were also installed as part of the project.
  4. Expansion electricity production projects: involves installing electricity production devices at a coal mine where coal mine waste gas is currently or has previously been converted. Credits are given for the extra methane converted by the newly installed electricity production devices, and any flaring or flameless oxidation devices also installed as part of the project. Credits are also given if the electricity generated displaces a more carbon-intensive source of electricity (such as the grid).
  5. Displacement electricity production projects: involves installing electricity production devices at a coal mine. Credits are given if the electricity generated displaces a more carbon-intensive source of electricity (such as the grid). Credits are also given for the conversion of ventilation air methane if flameless oxidation devices were also installed as part of the project. This project type is designed for projects which are under regulatory obligations that require the destruction of methane.
  6. Ventilation air methane only projects: involves installing devices to treat ventilation air methane. Credits are only given for converting ventilation air methane. It does not matter if the mine is converting, or has converted in the past, other coal mine waste gas.

Eligibility

The following requirements need to be met to be eligible to use the method:

  • Coal mines considering new flaring or flameless oxidation projects, or new electricity production projects, must not have achieved more than 5,000 tonnes CO2e emissions reductions from converting coal mine waste gas in any previous financial year.
  • Expansion flaring or flameless oxidation projects and expansion electricity production projects must increase the recognised capacity of existing devices. The recognised capacity of existing devices is worked out as the conversion capacity of all devices that existed between 24 April 2014 and the time of application to register as an Emissions Reduction Fund project. Information on the recognised capacity of existing devices must be provided at application time.
  • Projects at mines that have an existing regulatory requirement (as defined by the Coal Mine Waste Gas Determination) to destroy coal mine waste gas are not eligible as flaring or flameless oxidation projects or electricity generation projects. Such projects may be eligible as electricity displacement or ventilation air methane only projects.

Monitoring, reporting and auditing

Parameters that are required to be monitored are specified in the method. Key parameters include:

  • the proportion of methane in the coal mine waste gas
  • the amount of coal mine waste gas sent for conversion
  • the operation of the conversion device according to the manufacturer's specifications
  • the quantity of electricity consumed or produced as a result of the project.

In addition to the reporting and monitoring requirements set out in the method, there are general requirements that apply to all ERF projects. These are specified under the Carbon Credits (Carbon Farming Initiative) Act 2011 and Carbon Credits (Carbon Farming Initiative) Rule 2015. For example, the Rule specifies that proponents must report all of the components of the final abatement calculation.

Proponents are required to keep records of their compliance with all project requirements specified in the method, the Act and the Rule. These records will be used when reporting to the Clean Energy Regulator and are likely to be requested during audits.

Projects must be audited by a registered greenhouse and energy (NGER) auditor. A list of registered auditors is available on the Clean Energy Regulator website.

Development of this method

Development of the original method

The original method was made on 13 February 2015 and can be accessed here.

Public consultation - original draft method

The public consultation was undertaken as part of the development of the original Method in September 2014. The following information is available for reference:

Note: A draft method determination that is open for public comment should not be relied upon for planning an ERF project. Draft method determinations may be modified following public consultation and are not final until made by the Minister for the Environment.

Emissions Reduction Assurance Committee (ERAC) advice

The ERAC's advice to the Minister regarding the Determination is published here, in accordance with Section 106(11) (C) of the Carbon Credits (Carbon Farming Initiative) Act 2011.

The 2016 Variation

The Method was amended by the Carbon Credits (Carbon Farming Initiative - Coal Mine Waste Gas) Methodology Variation 2016 (the 2016 Variation) on 7 November 2016. The 2016 Variation expands crediting to flameless oxidation devices that treat methane. Flameless oxidation is a process that can convert ventilation air methane (very low concentration methane) into carbon dioxide. This helps to reduce Australia's emissions because carbon dioxide is a less potent greenhouse gas than methane.

The change will provide projects with the potential to unlock substantial new sources of abatement. Ventilation air methane emissions accounts for about 60 per cent of fugitive emissions from Australian underground coal mines.

Other changes include amendments to the method's abatement calculations. These amendments:

  • allow crediting for emissions reductions from both the flaring of coal mine waste gas and the generation of electricity in the same project
  • reflect the updated global warming potential of methane.

Public consultation - The 2016 Variation

The 2016 Variation was open for public consultation in August 2016. One confidential submission was received through the proposed Variation public consultation process.

The following information remains available for reference:

Coal mine waste gas variation 2016: Consultation draft (PDF - 441.47 KB) | (DOCX - 228.7 KB)
Coal mine waste gas variation 2016: Draft explanatory statement (PDF - 177.85 KB) | (DOCX - 83.24 KB)

Emissions Reduction Assurance Committee (ERAC) advice

The ERAC's advice to the Minister regarding the Variation is published here, in accordance with Section 2016(11)(C) of the Carbon Credits (Carbon Farming Initiative) Act 2011.

The 2019 Minor Variation

The Carbon Credits (Farming Initiative - Coal Mine Waste Gas) Methodology Determination Variation 2019 was made on 12 March 2019 to refine the definition of 'existing regulatory obligation' under section 6 of the Determination. The definition is used to determine when emission reduction activities are effectively required by law, including where alternative activities are restricted. This ensures projects that are already required by law are not credited under the Emissions Reduction Fund.

The 2019 Variation amendments were minor and intended to retain the original policy intent through removing ambiguity. In particular, by specifying the relevant requirements under State or Territory law need not mandate 'flaring' or 'electricity generation'.

Subsection 114(9) of the Carbon Credits (Carbon Farming Initiative) Act 2011 allows minor amendments to be made without advice from the Emissions Reduction Assurance Committee and without public consultation under section 123D. While not a legislative requirement, the Department undertook targeted consultation during the second half of 2018. This included consultation with affected project developers, industry associations, the Emissions Reduction Assurance Committee and the Clean Energy Regulator.

Audiences

  • Emissions Reduction Fund

Interests

  • Climate Change
  • Emissions Reduction Fund