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Australia Approves Giant Coal Extension Despite Paris Commitments
By Felicity Bradstock - Oct 11, 2026, 10:00 AM CDT
- NSW's Independent Planning Commission approved the HVO Continuation Project, keeping one of Australia's largest coal complexes running into the 2040s and unlocking about 429 million tonnes of coal.
- The commission ruled that jobs, royalties and regional stability outweigh an estimated 809 million tonnes of lifetime emissions, and attached conditions on export destinations, renewable power use and carbon offsets.
- The project still needs federal environmental approval before year-end, and the decision lands weeks before Australia leads negotiations at COP31.
Australia has long been known for its strong coal industry, being one of the world’s largest producers and exporters. While much of the world moves away from coal in favour of cleaner energy sources, Australia is doubling down on its coal production, with plans to extend the life of coal operations in New South Wales.
The New South Wales (NSW) Independent Planning Commission (IPC) approved an extension at the largest coal mine project in the region’s history in September, allowing it to continue operations until 2045, extracting an estimated 429 million tonnes of coal across its North and South sites. The Hunter Valley Operations (HVO) Continuation Project was approved following a contentious assessment that drew criticism from climate and environmental groups, unions, and state authorities.
Upon announcing project approval, the IPC said that while the mine would “contribute to climate change impacts on the people, economy and environment of the Hunter region, NSW and globally,” its development was necessary. The IPC stated the impacts have been “outweighed by its benefits to the Hunter region and NSW, including continued employment, economic activity, support for local business, ongoing royalties and taxation revenue”.
The project is also expected to “provide economic stability for the Hunter region and support a more orderly transition for workers, businesses and communities as the coal industry changes over time”, said the IPC. HVO is thought to contribute over $1 billion annually to the economy. The proposal was backed by Premier Chris Minns and Natural Resources Minister Courtney Houssos, as well as the NSW Coalition. The IPC received over 10,000 public submissions, with around 60 per cent in favour of the project.
However, climate campaigners who oppose HVO have criticised the IPC’s greenlighting of the project, suggesting the decision is at odds with Australia’s commitments under the Paris climate agreement.
“We are right on this knife-edge of dangerous levels of global warming, but obviously also too little has been done to prepare the Hunter region for the closure of mines,” said Georgina Woods, the co-national coordinator of the Lock the Gate Alliance. “Every single year, greenhouse gas pollution resulting from this mine will wipe out all the efforts that everyone in Australia and NSW is making to reduce our own pollution,” she added. “There is no other way to describe this other than a catastrophic failure of the New South Wales planning system to protect the people of the state from the worst impacts of global warming.”
Coal mining continues to contribute heavily to Australia’s energy mix and economy. Australia produced approximately 431 million tonnes of coal in 2025, and coal contributed around 28.8 per cent of Australia’s energy supply in 2025. In Hunter Valley alone, approximately 1,500 people are employed by the coal industry.
While the extension of the project will provide economic benefits in the region, the Hunter Valley is expected to generate 809 million tonnes of greenhouse gas emissions over 19 years, with knock-on environmental implications. The continuation of coal mining is expected to exacerbate climate challenges in the coming decades. One member of the Climate Council explained, “What NSW exports as coal, we import back as bushfires, floods, heatwaves and droughts… Climate harm does not stop at the border, and neither does the responsibility for it.”
The project also requires federal environmental approval to proceed, with a decision expected before the end of the year. If approved, the IPC and HVO would need to establish a plan to manage emissions from overseas coal burning, limiting exports to “jurisdictions with greenhouse gas emissions policies consistent with the goals of the Paris Agreement”. The operator will be expected to look for ways to reduce greenhouse gas emissions, maximise the use of renewable energy, and purchase additional carbon offsets.
NSW Minister for Finance Courtney Houssos stated, "We’ve got legislated net-zero emissions targets, and we will adhere to those, but we also understand the important role that coal mining has, particularly for the Hunter Valley, but for our entire state’s economy.”
Australia, which is co-hosting the next United Nations COP 31 climate summit alongside Turkey in November, has been criticised for supporting new coal development and for remaining largely silent on the need to secure a deal to transition the world rapidly away from fossil fuels. Climate activists have accused both Australia and Turkey of being a “vacuum of action” on plans for a transition away from coal, gas and oil – a key goal of many countries participating in the conference.
The extension of HVO comes as a surprise to many, particularly given Australia’s hosting of COP31, as countries aim to move away from coal in favour of cleaner energy sources. As coal continues to contribute heavily to both the country’s energy mix and economy, the government must focus on preparing coal-dependent regions to transition from coal production to alternative energy projects that support continued economic growth.
By Felicity Bradstock for Oilprice.com
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