Hunter River salinity credits for auction

The credits, which are part of the Hunter River Salinity Trading Scheme, permit the holder to discharge saline water into the river during times of heavy flow.

The scheme, introduced in 1995, contains 1000 credits that are held by mines, power generators and other industries.

Twenty per cent of the credits expire and are replaced every two years.

Hunter Valley Water Users Association president Arthur Burns said the scheme had been an effective mechanism to control salinity in the river.

"We think it's been a win-win," he said. "Before the trading scheme we had a trickle discharge situation where the mines couldn't get away what they needed to."

Salinity levels have dropped by 20 per cent since the scheme began.

The amount credit holders can discharge varies depending on river flow, salt levels and the river's capacity to flush the salt out.

"It ensures that Hunter River salinity targets are not exceeded due to saline discharges from facilities with environment protection licences," an Environment Protection Authority spokeswoman said.

"Participants may only discharge when the river is in 'high' or 'flood' flow and they must hold enough credits to cover the amount of saline water they wish to discharge."

Mr Burns said the scheme had led to the development of innovative ways of using saline water.

"You now find there is a network of pipes between the different mines," he said.

"Instead of pumping saltwater into the river its being used for other purposes."