Open cut coal fugitives higher order estimation: what are the potential risks of non-compliance?

Moving to a Method 2 or 3 estimation of fugitive emissions will save open cut coal mines millions of dollars in carbon costs this year.  However, higher order methods require a greater level of rigour and a heavier compliance burden. A 10% error in estimation could result in $100,000s of additional carbon cost and shortfall charges, while a major compliance breach in the Estimator’s report could end up costing millions of dollars.

The Clean Energy Regulator has demonstrated that they will not hesitate to “name and shame” liable entities who fail to report emissions and acquit emissions units.  Recently four companies who had not reported their interim emissions number and would incur shortfall charges for not paying the carbon price were “outed” in the media. A significant breach of the NGER reporting requirements for higher order methods that results in the imposition of a shortfall charge will lead to the risk of that non-compliance being publicised.
We recommend a thorough pre-audit review to mitigate against risks of over or under payment.
Energetics and our fugitives estimation partner, Geos Mining, are able to conduct a review of compliance.  This can range from a verification of the numbers through to a formal reasonable assurance opinion, depending on your needs. Benefits of an independent review of your estimation include:

  • A “second opinion” where the estimate has been produced in-house

  • Additional comfort to senior management who are responsible for final sign-off of the figures

  • Reduced risk of a later blow-out in your carbon budget

  • Reduced risk of negative publicity

Contact one of Energetics' experts for advice. 

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