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Coal mine waste gas

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08 October 2021
CFI ERF
Is the coal mine waste gas method suitable for your business?
  • Is your facility an operating underground coal mine?
  • Are you looking to destroy or convert some or all of the waste methane drawn from the mine b​​​y installing a flaring, flameless oxidation or electricity production device?

If you have answered yes to both of these questions, the coal mine waste gas method may be suitable for your business. Read on for eligibility and compliance details.

The methane in coal mine waste gas is a greenhouse gas emitted by coal mines. The coal mine waste gas method applies only to underground coal mines. The method sets out criteria for projects that reduce emissions either through flaring, oxidation, destruction, or conversion of waste gas to operate an electricity production device. 

These projects have a significant abatement effect as coal mine waste gas is primarily methane. Destruction, conversion, or oxidation converts the methane into carbon dioxide, which has a lower global warming potential. When coal mine waste gas is destroyed or converted in an electricity production device, the project can have can have the additional abatement effect of displacing electricity produced by other generators on the electricity network.

Two or more mines that are located sufficiently close together may share devices. It is important that sharing mines are identified in the application for  declaration of the project, providing project requirements are met.​

​Method variations​

The Clean Energy Regulator develops variations to methods for a range of reasons including:

  • to implement an Emission Reduction Assurance Committee (ERAC) decision to extend the crediting period of a method
  • to ensure methods continue to operate as originally intended
  • to account for technological advances that enable new measurement approaches.

Methods being varied or methods under review are published on the Department of Industry, Science, Energy and Resources (DISER) website and our method consultation page.

The method variations page provides additional information about how a method variation might affect an existing project.

2021 Coal mine waste gas variation

The coal mine waste gas method variation came into effect on XX 2021. The coal mine waste gas method has been varied to:

  • implement the crediting period extension of 5 years recommended by ERAC
  • allow electricity generation projects previously eligible to earn large-scale generation certificates under the Renewable Energy Target to transition to the Emissions Reduction Fund for a 5-year crediting period
  • amend the emissions intensity factor used in the abatement calculations to the value that is current at the time of reporting
  • clarify the length of time a parameter can be estimated during a non-reporting period.

If you have a current coal mine waste gas project, you may be able to transfer your project to the varied version of the method. Apply to transfer your project through the Client Portal.

Legislative requirements

You must read and understand the method and other legislative requirements to conduct a coal mine waste gas project and earn Australian Carbon Credit Units (ACCUs). This includes:

Tools and Resources

Department of Industry, Science, Energy and Resources information on the coal mine waste gas method

Coal mine waste gas - project ap​plication guidance​​

Quick reference guide to the coal mine waste gas method

Quick reference guide contents:​

Crediting period

The crediting period is the period of time a project undertakes activities which generate eligible abatement.

The following project types are eligible for a 12 year crediting period:

  • new flaring or flameless oxidation projects
  • expansion flaring or flameless oxidation projects
  • new electricity production projects
  • expansion electricity production projects
  • displacement electricity production projects
  • ventilation air methane projects.

Electricity generation projects that were previously eligible under the Renewable Energy Target are eligible for a 5-year crediting period only. This includes the following project types:

  • Transitioning electricity production projects
  • Transitioning displacement electricity production projects.

Relevant section of the Act:

​Eligibility requirements

There are ​general eligibility requirements in the Act which include:

  • newne​ss​, and
    • the method has an in-lieu provision for newness for electricity generation projects that were formerly under the Renewable Energy Target until 31 December 2020.
  • additionality and funding from other government programs, and
    • ​​the method also has an in-lieu provision for regulatory additionality such that the coal mine lease holder must have no regulatory obligation to destroy the methane component in the coal mine waste gas.
    • legal right.

The coal mine waste gas method is split into five categories of the project and each has additional specific eligibility criteria. Further detail about the specific eligibility criteria for each category can be found in Part ​3 of the method.​

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Relevant section of the Act:

Relevant section of the Method:

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​​​Project Activities

A project involves the destruction or conversion of the methane component of coal mine waste gas from an operating coal mine by the installation or expanded use of a flaring device, a flameless oxidation device, or an electricity production device. This can include destroying the methane component of mine ventilation air.

Transitioning projects involve the operation of an electricity generation device that was formerly under the Renewable Energy Target until 31 December 2020.

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Exclusions

Applicants should be aware of types of projects that are excluded by the method, including:

  • projects that involve the capture and use of coal seam methane (ie, where it is not coal mine waste gas)
  • projects that involve the capture and use of gas drawn from a decommissioned underground coal mine
  • projects that involve the capture and use of gas drawn from a mine operating under a petroleum lease alone
  • projects that propose the capture and use of coal mine waste gas from an underground coal mine that is not yet operating, and
  • projects focused only on capture and flaring of waste gas where the destruction of methane is required by C​ommonwealth, State or local legislation.

Relevant section of the Method:

How is abatement calculated?

Abatement is calculated by looking at the potential emissions of the destroyed or converted methane and reducing this by the resulting CO2 emissions, the ancillary emissions that result from the project and any historic abatement (where the project expands on existing abatement).

Emissions associated with the delivery of electricity to the grid are incorporated by applying a marginal loss factor to the electricity calculation.

Carbon dioxide and nitrous oxide, which are components of the waste gas, are unaffected by the destruction or conversion and are therefore excluded from abatement calculations.

Please see part 4 of the method for further information about the equations that are to be used in calculating the abatement.

Relevant section of the method:

Monitoring requirements

In addition to the general m​onitoring requirements of the Act, projects must meet specific monitoring requirements in the method. These include monitoring:

  • the volume of the methane component of the coal mine waste gas
  • the quantity of electricity produced in any generator
  • ​ancillary electricity or additional fuel consumed by the project, and
  • whether the flare, flameless oxidation system or generator is operating.

The method also sets out the consequences for failing to monitor certain parameters.

Relevant section of the Act:

Relevant section of the Method:

Record keeping requirements

This method does not require any record keeping requirements that are additional to the general record keeping requirements of the​ Act and the Rule.

Each project will provide an offsets report as and when required by the Clean Energy Regulator.​​

Relevant section of the Act:

Relevant section of the Rule:

Reporting requirements

The Act and the Rule provide the general reporting and notification requirements and the Method sets out two further method specific reporting requirements in relation to certain factors and parameters used to calculate abatement.

Relevant section of the Act:

Relevant section of the Rule:

Relevant section of the Method:

Audits

All projects receive an audit schedule when the project is declared and must provide audit reports according to this schedule. A minimum of three audits will be scheduled and additional audits may be triggered. For more information on the audit requirements, see the Act, the Rule and the audit information on our website.

Audits during an extended crediting period

Once you submit an application to transfer your project to the varied method, the Clean Energy Regulator will be in touch to discuss appropriate auditing during the extended crediting period.

Relevant section of the Act:

Relevant section of the Rule:

Specialist skills recommended

Specialist skills will be required to carry out the project with the method. Examples of specialist skills include:

  • Registered Professional Engineer (PE)
  • Certified Energy Manager (CEM)
  • Certified Measurement and Verification Professional (CMVP)
  • Verified experience in energy or facility management, or measurement and verification

Relevant section of the Rule:

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