Practical actions to reduce emissions in the sector

The Australian resources sector has and will continue to capitalise on new technologies, systems and approaches to managing its own emissions. The pathway to net zero will be enabled by 3 trends:

• reducing fuel combustion emissions
• reducing fugitive emissions
• scaling up carbon management technologies.

Reducing fuel combustion emissions

Energy efficiency | Demand flexibility | Electrification or fuel switching

Reducing fuel combustion emissions is a key priority for the resources sector, given the scale of diesel and gas use across extraction and processing activities. Electrification and fuel switching are credible pathways for many companies, including through the adoption of low‑carbon fuels such as renewable diesel and other low‑carbon liquid fuels where renewable infrastructure is not available. Energy performance will underpin emissions reductions at the lowest cost within the sector (DCCEEW 2024d). (Note: Energy performance is the broad management of energy demand, including energy efficiency, electrification or fuel switching and demand flexibility.)

The sector will pursue innovative technologies to improve energy performance, focusing on efficiency in extraction and processing, precision in resource mapping, and operational optimisation (MCA 2017). These improvements will help reduce emissions, energy usage and operating costs.

Electrifying vehicles and equipment across resources facilities will significantly reduce diesel consumption, which currently accounts for most energy use on‑site (in 2020–2021, 95% for mine sites) (Advisian 2022). Electrification enables the sector to leverage firmed renewable energy capacity, including within major grids across Australia. The sheer scale and distance of some on‑site operations, such as train and large vehicle haulage across expansive mine sites, presents a substantial technical and logistical challenge. Analysis from research and stakeholder engagement suggests that electrified haulage options are rapidly improving, with broader uptake expected over the next decade. This trajectory reflects the sequencing challenges posed by existing asset lifecycles and the infrastructure requirements necessary to support electrification. 

Given many resources facilities are located in remote locations with limited grid access, off‑grid solutions may offer a practical and effective decarbonisation pathway in many cases. The sector is currently collaborating with technology and service providers to accelerate innovation and deployment of electrified solutions.

Operators are increasingly partnering with energy providers and independent power producers to deploy off‑grid systems powered by renewables. As renewable energy capacity at remote sites becomes more resilient and efficient, mining operations will be able to deploy electrified vehicles and equipment at scale.   

Other operations (in particular, but not exclusively, offshore facilities) are unable to develop on‑site renewable generation or connect to larger electricity grids due to location, cost associated with transmission or environmental constraints. In these cases, facilities will need to meet any applicable decarbonisation requirements by pursuing the most economically viable options available to them.

While long‑distance freight emissions and electricity transmission infrastructure fall outside the scope of this plan, they are critical enablers of the transition and are addressed in the Transport and Electricity and Energy Sector Plans respectively.

Low‑carbon fuels will offer an alternative to diesel and natural gas, particularly where electrification is not feasible, such as in remote areas where transmission infrastructure is too expensive to deploy. These fuels are a valuable decarbonisation option, with examples including biodiesel, renewable diesel, ammonia‑based fuels and hydrogen.

The Australian Government is taking steps to accelerate the growth of domestically produced, cost‑competitive low‑carbon fuels under the Future Made in Australia agenda. To build a supply chain for Australian low carbon liquid fuels, the Australian Government will invest $1.1 billion in a new Cleaner Fuels Program. This will help stimulate private investment in Australia’s first onshore low carbon liquid fuel refineries, backing local innovators, making fuel supply more resilient and bridging the price gap for early adopters. The government will engage with industry on how to make sure Australian liquid fuel users have a fair chance to capture the emissions reduction potential unlocked by low-emission Australian fuels. More detail can be found in the Net Zero Plan and Electricity and Energy Sector Plan.

Gas as a chemical feedstock to manufacturing processes cannot be electrified and will require direct substitution. Altering the feedstock used in a process is not straightforward, as chemical processes are typically fully integrated into the facility. This means investment in new infrastructure and supply chains will be required. Transition is likely to require a change to the whole operation rather than a gradual change to the facility. Such changes involve significant capital outlays and require extensive testing and planning. 

Treasury’s Baseline Scenario indicates that in 2050, fuel combustion emissions in the sector will reduce to around 20% of what they are in 2025, as seen below. 

Reducing fugitive emissions

Pre drainage | VAM abatement | Reduced routine venting and flaring | Leak detection and repair

Fugitive emissions remain one of the most complex and critical challenges in the resources sector’s pathway to net zero. Each tonne of methane released has the same warming effect as 28 tonnes of carbon dioxide over 100 years (IPCC 2014). Australia is a signatory to the Global Methane Pledge and is committed to reducing methane emissions across energy commodities production.

New approaches to estimating fugitive methane emissions by combining atmospheric detection of methane with modelling and other analysis involving aerial imaging (top‑down approaches) are being developed. The Australian Government has appointed an expert panel to examine these new approaches and advise whether they could enhance Australia’s estimation of fugitive methane emissions (DCCEEW 2025b). Better detection and measurement of methane is also important to addressing methane emissions, such as through leak detection and repair.

The sector is also taking steps to reduce its methane emissions. During the 28th Conference of Parties (COP28), 50 global oil and gas companies (including some operating in Australia) committed to net zero operations by 2050 and ending routine flaring by 2030 under the Oil & Gas Decarbonisation Charter. 

As energy production continues, reducing fugitive emissions from the coal and gas sub‑sectors can make a significant difference in the pathway to net zero. In the coal sub‑sector, 95% of fugitive emissions are made up of methane. In contrast, oil and gas operations tend to release more carbon dioxide, with 68% of fugitive emissions from oil and gas extraction being carbon dioxide in 2024 (DCCEEW 2024b). (Note: DISR data processed by National Inventory Systems and International Reporting Branch of DCCEEW and the Analysis and Insights Division at DISR.)

Coal

Abating coal mine methane is a major opportunity to reduce fugitive emissions in the coal sub‑sector, with underground mines responsible for the majority of production‑related methane (CSIRO 2025a). Most of these emissions come from ventilation air methane (VAM), which is currently difficult to mitigate due to low and variable methane concentrations and complexity in meeting safety requirements (NSW Resources 2025). 

The government is actively supporting a VAM abatement project using regenerative thermal oxidation technology under the Powering the Regions Fund. This project is intended to demonstrate that the abatement of VAM emissions for underground gassy mines safely is possible, providing a replicable pathway for many underground gassy mines to materially reduce their emissions (GrantConnect 2024).

The sector is exploring other approaches such as pre‑mining drainage for open‑cut mines (CCA 2024a), and new ways of safely oxidising methane (CSIRO 2025b).

The Australian Government will continue to work closely with state governments and their agencies on coal mine methane abatement, particularly to help ensure new technologies, such as for VAM, can be safely and efficiently deployed. State government agencies also regulate coal mines, including in relation to the implementation of abatement technologies for waste coal mine gas. 

Oil and gas

Fugitive emissions in the oil and gas sub‑sector can be reduced by minimising or eliminating venting and flaring. Technologies to reduce the incidence or intensity of venting and flaring include process and infrastructure optimisation, gas and vapour recovery and utilisation, and use of flaring instead of venting when gas capture is not commercially viable. 

The Future Gas Strategy committed to reducing and, where possible, eliminating venting and flaring of gas, unless required for safety purposes. A consultation process occurred in March 2025 and offshore policy and regulatory settings are being assessed, to implement this commitment. The Australian Government will continue to work with state and territory governments on their equivalent regulatory regimes.

Leak detection and repair and monitoring programs can also contribute to emissions reduction in the oil and gas sub‑sector while maximising gas outputs for energy production. Spectral gas imaging is widely used to detect leaks, and continuous monitoring devices will be increasingly used to allow for rapid detection and rectification of leaks (IEA 2023a). Innovative robotics and remote operations can also lead to more safe and cost‑effective leak detection and remediation. The oil and gas industry should continue to pursue and invest in innovative solutions to minimise emissions from leaks, alongside regulatory approaches.

Scaling up carbon management technologies

Carbon capture and storage

Carbon management refers to a suite of technologies and processes that help to remove, reduce or reuse carbon dioxide and other gases. The most applicable for the resources sector is carbon capture and storage (CCS).

Other carbon dioxide removal technologies continue to be a focus for development through the CSIRO, brought together through the CarbonLock Program (CSIRO 2024). Technologies applicable to the resources sector such as enhanced mineralisation from tailings are actively being developed in partnership with industry, for example a pilot carbon mineralisation project using mine tailings at BHP’s Mount Keith Nickel West Mine in Western Australia (Austrade 2024).

Australia has several comparative advantages when it comes to CCS. Our geology, landmass, existing regulatory frameworks, existing infrastructure and expertise, and potential for cheap, renewable energy resources all offer opportunities for domestic and international transport and storage of CO₂ (CSIRO 2023a).

CCS can address industrial and point‑source emissions that cannot otherwise be avoided. CCS projects can reduce emissions from resources sector activities by capturing and storing reservoir carbon dioxide that would otherwise be emitted during gas production. 

Australia is home to one of the largest CCS facilities in the world (Gorgon, at Barrow Island, off the coast in Western Australia). Another large‑scale CCS project has recently been commissioned (Moomba, in South Australia) and a third project has just been granted major project status (Bonaparte, in the Northern Territory). 

According to the International Energy Agency, CCS as well as carbon, capture and use (CCU) could be responsible for abating around 20% of global emissions required to reach net zero by 2050 (IEA 2021). While the IEA notes that progress on CCS has been slower than needed to meet this ambition and there have been technical challenges to overcome with these significant engineering projects, the scale of the opportunity remains significant. CCS is used in almost every model pathway assessed by the IPCC that reaches net zero emissions – including in pathways which assume a high uptake of renewables. Australia is therefore well placed to capitalise on the scale‑up of this technology, widely recognised as essential to reach net zero. 

The government’s role in the development of CCS is focused on the regulatory frameworks to facilitate its deployment, such as the Safeguard Mechanism, and offshore regulatory framework for its safe operation. Emissions accounting and verification is also assessed under the National Greenhouse and Energy Reporting Scheme. Offshore CCS activities are regulated under several pieces of Commonwealth legislation including the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Environment Protection (Sea Dumping) Act 1981.

Offshore CCS opens the door to new trade opportunities, leveraging Australia’s geological capacity to enter new international markets for transboundary CO₂ storage. Through the Regional Cooperation Initiative on Carbon Sequestration, the Australian Government is working collaboratively with key regional and partner countries to establish bilateral instruments to facilitate transboundary CCS. 

International volumes of CO₂ could generate the economies of scale needed to help reduce the cost of CCS. This would make CCS a more accessible option for Australia’s domestic industries while also helping the economies of Australia’s trading partners

Mtpa = million tonnes per annum.

Source: (Chevron Corporation 2025), (Santos 2025), (Inpex 2025)

More projects are currently at various stages of development. It is estimated that Australia has approximately 31 Gt of sub‑commercial storage capacity and 470 Gt in undiscovered storage resources (GA 2024c).