A FEDERAL emissions reduction regime that has allowed Centennial Coal to dramatically lift carbon and methane emissions from its Myuna and Mandalong coal mines for the second year in a row, without incurring millions of dollars in emission costs, is failing taxpayers and the environment, say critics who have demanded change.
The federal Clean Energy Regulator allowed Centennial to increase its emission baseline at Wangi Wangi's Myuna colliery by 65 per cent in 2017-18, and by 47 per cent in 2018-19, based on a Centennial argument that while total emissions increased it had reduced emissions per tonne of coal produced.
The company used the same argument to secure increased emissions from its Mandalong mine.
But critics including the Australian Conservation Foundation say the flawed federal emissions regime, including a "safeguard mechanism" introduced by the Abbott Federal Government to stop industrial emission increases cancelling out emission cuts paid for by taxpayers, is a huge failure.
In October the Australian Industry Group also expressed concern that safeguard baseline changes removed incentives to reduce emissions and did not "penalise or drive change to existing emissions".
The ease with which some companies obtain safeguard baseline emission increases undermines the whole regime and is a factor in the significant rise in total national industrial emissions in the past few years, while the power and agriculture sectors are reducing emissions, the Australian Conservation Foundation said.
"Centennial has avoided having to buy around $6.2 million in carbon offset credits, pay an alternative financial penalty or implement strategies to cut its mining pollution," ACF climate campaigner Suzanne Harter said.
The $6.2 million is calculated using the price the Federal Government pays for carbon credits, using taxpayer funds, under its emission reduction regime.
The federal regime set a baseline of emissions for more than 100 of Australia's largest industrial facilities that released more than 100,000 tonnes of carbon and methane emissions each year.
The regime required companies that breached their "baselines" to buy carbon credits from the government that had been created by cuts elsewhere, to "safeguard" the cuts.
Instead the Clean Energy Regulator had repeatedly allowed industries to increase their baselines, the ACF said.
"This blowout is a reminder that there's virtually no cost or penalty for the big polluters that are fuelling climate damage in Australia, such as this summer's devastating bushfires," Ms Harter said.
"The so-called safeguard mechanism was established as a 'do nothing' policy, setting baselines for Australia's biggest polluters based on historic high points in their emissions.
"This latest analysis shows it's even worse than that - big polluters are using the safeguard mechanism as a cover for emissions blowouts, allowing them to increase their pollution without penalty under the guise of climate action."
Under the Emissions Reduction Fund, described by the government as a significant tool to reduce emissions, federal taxpayer funds have been awarded to a contractor to reduce emissions at Mandalong colliery.
In December, 2017 the contractor won the government contract to "intall and operate electricity production devices to capture and combust the methane component of coal mine waste gas", a project the company said would lead to a 357,500 tonne reduction in emissions at Mandalong.
Ms Harter said Myuna colliery alone had been approved to emit an additional 450,000 tonnes beyond its "baseline" over the past two years, which demonstrated the failure of the government's regimes at significant public expense.
"The safeguard mechanism is not even doing the basic job of protecting public money spent through the Emissions Reduction Fund from blowing out elsewhere in the economy," Ms Harter said.
Centennial Coal has been contacted for comment.
In response to previous questions about the mines and emission reductions, a spokesperson said the baseline increases were approved because the company met provisions in the legislation.