Australia’s coal sector has seen mine methane emissions decline in the 2025 fiscal year, but a new study contends that the sector is using accounting tricks and a massive surge in carbon offsets to mask a lack of genuine methane abatement.
Energy Think Tank Ember has released a new study that reveals that while coal mine methane emissions (CMM) fell by 3.5 per cent in 2025, the reduction was largely a result of operational disruptions and regulatory loopholes rather than the installation of new emissions-reduction technology.
Ember’s analysis estimates that CMMs were between 22.1 and 22.4 million tonnes of carbon dioxide equivalent in 2025.
However, coal mines used approximately 6.3 million tonnes (MtCO2e) of offsets to meet their Safeguard Mechanism (SGM) obligations, a 40 per cent increase from the previous fiscal year, with Australian Carbon Credit Units (ACCUs) making up the lion’s share.
Over half of these ACCUs were sourced from avoided deforestation projects. Analysts point to a significant mismatch in this strategy, as these credits address carbon dioxide, while methane remains the primary pollutant for 61 per cent of coal mining emissions.
“The Safeguard Mechanism should be driving genuine methane cuts at coal mines, not allowing compliance to be met through rising offset use and accounting changes.
“Without stronger incentives for on-site abatement, Australia risks reporting progress while leaving major methane sources largely unaddressed,” said Sougol Aghdasi, CMM analyst at Ember.
Ember’s analysis suggests that some reductions exist only on paper. The Hail Creek mine, for example, generated roughly AU$9 million in Safeguard Mechanism Credits (SMCs) after its reported methane intensity dropped by 38 per cent.
However, the report claims this was due to a change in emissions factor methodology rather than actual abatement. Independent satellite data suggests actual emissions at such sites could be significantly higher than reported.
At other sites, declines were the result of misfortune rather than management. The largest single reduction occurred at the Grosvenor mine, where emissions plummeted by 1.07 MtCO2e simply because operations were halted for most of the year following a mine explosion.
Dody Setiawan, Senior Climate and Energy Analyst at Ember, warned that the current system allows the industry to report progress while leaving major methane sources unaddressed.
“The Safeguard Mechanism should be driving genuine methane cuts, not allowing compliance to be met through rising offset use and accounting changes,” Setiawan said.
With a review of the Safeguard Mechanism approaching, Ember is calling for stricter oversight, transparent disclosure of emission estimation methods, and a requirement that credits be generated only through evidence of physical abatement.