The former Liberal leader will no longer head up the Net Zero Emissions and Clean Economy Board, an appointment announced last week.

NSW Minister for Energy and Environment Matt Kean made the decision public on Tuesday after days of pressure from NSW One Nation leader Mark Latham in relation to the looming Upper Hunter byelection.

"The focus should not be on personality," Mr Kean said.

"However, no person's role on the Board should distract from achieving results for the NSW people or from the government's work in delivering jobs and opportunities for the people of NSW.

"For this reason, I have decided not to proceed with his appointment as chair."

Mr Kean said a new chair would be announced in due course but NSW Chief Scientist and Engineer

A new chair of the Board will be announced in due course. Until then, the NSW Chief Scientist and Engineer Hugh Durrant-Whyte will act in the role.

It comes after Mr Latham argued that the Upper Hunter may become "one big Centrelink office" following former prime minister Malcolm Turnbull's appointment.

Mr Turnbull had made comments indicating he would push to stop new coal projects in the region.

Speaking with Ben Fordham on 2GB on Monday morning, the NSW One Nation leader described Mr Turnbull as an "anti-coal activist".

New coal mining proposed for the Hunter region must be stopped because there isn't enough rail or port capacity or global demand to shift it, a report backed by Mr Turnbull warns.

Proposals for new coal projects have a combined output of almost 100 million tonnes per year or 10 new Adani-sized mines in the Upper Hunter Valley alone, according to the Australia Institute.

Now head of the NSW Net Zero Emissions and Clean Economy Board, Mr Turnbull says a comprehensive plan and moratorium needs to replace the focus on transient royalties.

Mr Turnbull - who owns land in the Hunter - said when mining companies failed to meet their rehabilitation obligations, it was the community and state government that picked up the tab.

Mr Latham was speaking after it was confirmed that One Nation would be fielding a candidate in the Upper Hunter by-election next month following Michael Johnsen's departure from politics.

"They've got someone there who, for a range of reasons, wants to destroy coal mining and that's an economic disaster for this region," Mr Latham told 2GB.

"They should have just stuck to their existing committees and forgot about Malcolm Turnbull, the anti-coal activist.

"Unless we've got coal in the Upper Hunter you're going to turn it into one big Centrelink office, and that would be a tragedy."

The by-election will be a first test of One Nation's popularity in the area since coalminer Stuart Bonds won 21.6 per cent of the primary vote against Labor's Joel Fitzgibbon in Hunter in the May 2019 federal election.

Mr Bonds has had a public falling-out with the party's leadership after senators Pauline Hanson and Malcolm Roberts voted with the government to pass new industrial relations legislation which could adversely affect casual mine workers.

Mr Bonds has said he is weighing up whether to stand again for the party at the upcoming federal election.

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Australia Institute chief economist Richard Denniss said existing coal mines were already operating well below their approved capacity.

"Trying to build 10 new Adani mines' worth of coal mines in the Upper Hunter at precisely the time world demand for coal is falling is absurd," he said.

The report warns against approving "zombie" coal projects that won't be built as no one wants to invest next door to a mine site.

"We are not going to be coal mining in the Hunter in 30 years' time. They're seeking to get mines, get in before the party ends," Mr Turnbull said.

He said there was already enough capacity in the Hunter for coal mines to meet existing export demand and not damage the local thoroughbred industry.

Unlike coal, it could still exist in 100 or 500 years, he said.

The coal industry is currently proposing 23 new coal mines and mine extensions across NSW with a combined additional annual production of more than 155 million tonnes.

These proposals follow the doubling of production from 130 million tonnes in 2000 to 260 million tonnes in 2014, the report found.

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