Arche Energy provided a mine Safeguard Mechanism strategy for Ensham Coal Mine, which is one of the largest coal reserves in the world with 1.48 billion tonnes of coking coal. Coking coal is used to produce high quality coke for high-temperature activities like steelmaking.
Ensham Mine is on the land of the Western Kangoulu People 40km east of Emerald in Central Queensland.
The mine’s annual production capacity is seven million tonnes of coals. It has six pits on either side of the Nogoa River.
The Safeguard Mechanism
Introduced in 2016 following the repeal of the Carbon Pricing Mechanism, the Safeguard Mechanism aims to limit Scope 1 greenhouse gas (GHG) emissions from large industrial facilities like mines, manufacturing plants and power generation projects.
Scope 1 GHG emissions are released directly into the atmosphere by a facility’s activities. Examples include:
- emissions from fuel in transport
- fugitive emissions like methane leaks
- burning coal.
The Safeguard Mechanism applies to facilities emitting over 100,000 tonnes of carbon dioxide equivalent (CO2-e) per year.
Our involvement with the Ensham Mine Safeguard Mechanism Strategy
Arche identified and forecast the project’s baseline and likely Scope 1 emission reduction obligation as far as possible using available information and industry baselines.
The engagement required:
- identification of key emissions
- identification of emissions reduction options
- capex and opex estimation
- revenue estimation from different activities
- high level, basic unleveraged financial strategies.
Finally, our team of experts used this data to recommend a profitable and practical Safeguard Mechanism Strategy.
Learn more about the Safeguard Mechanism’s impacts on different industries from our CEO’s blog series.