The New South Wales government will continue to green-light coalmine expansions, effectively rejecting a warning from its climate agency that approving new developments would be inconsistent with the state’s legislated emissions targets.

Releasing a statement on the coal industry’s future, the Labor government said it would no longer consider proposals for “standalone greenfield coalmines” on undeveloped sites. But it would continue to allow expansions and time extensions at existing mines.

It said this balanced “energy security, jobs and regional development with the need to reduce emissions and meet NSW’s net zero targets”.

The NSW Minerals Council said the announcement was “very positive”, acknowledging it had been several years since a greenfield mine had been proposed through the state’s planning system.

The state’s natural resources minister, Courtney Houssos, said the strategy meant NSW would remain a reliable coal supplier “where market demand exists”.

“Coal has powered NSW for more than a century, and it will continue to support our economy for decades to come,” she said. “We are providing workers and communities confidence about the road ahead, supported by new opportunities as global markets evolve.”

In December, the NSW Net Zero Commission said the government should consider the climate impact when making coalmine planning decisions, including the “scope 3” emissions released after the coal was exported and burned overseas. It concluded new expansions were not consistent with the state’s legislative emissions reductions commitments – a 50% cut by 2030 and a 70% cut by 2035 compared with 2005 levels, and reaching net zero by 2050.

Georgina Woods, the head of research and investigations at the Lock the Gate Alliance, said the 18 coal projects in NSW’s planning pipeline were all expansions and extensions. None were greenfield projects.

She said the proposed expansions and extensions would create hundreds of millions of tonnes of greenhouse gas pollution.

Woods said the strategy acknowledged global demand for coal was reducing, but did not provide a clear pathway for the state to support the communities that will be most affected by the decline, and effectively rejected the advice of the Net Zero Commission ahead of a formal government response, expected in June.

“The NSW government is using semantics to mask the truth that coal project approvals will continue as business as usual while everyone else in the state must work harder to reduce pollution and bear the costs of damaging climate change,” she said.

At least eight expansion approvals since 2023 election

The government has approved at least eight coal expansions and extensions since the 2023 election.

The NSW Minerals Council’s chief executive, Stephen Galilee, said the support for further extensions would be welcomed by “thousands of coalmining workers”.

Nearly 90% of the coal extracted in NSW is thermal coal, burned in power plants to generate electricity. It is lower quality than metallurgical coal, which is used in steelmaking, and considered likely to be phased out more rapidly due to clean alternatives.

The government said that “while global demand for coal is expected to decline over time, coal will remain an important part of the NSW economy as renewable energy and industrial processes are deployed.”

The strategy was published as the state’s Environment Protection Authority released rules that it said would require major coalmines to “directly reduce fossil methane pollution, one of the most powerful greenhouse gases speeding up global warming”.

The EPA said high-emitting coalmines would need to capture, treat or convert leaking methane so that it was “less potent and causes less damage when it is released to the environment”.

“Reducing fossil methane is one of the fastest ways we can limit climate impacts in the near term,” said the EPA’s chief executive, Tony Chappel.

Lock the Gate said the rules had been watered down since a consultation draft last year, and the changes breached a duty to protect communities from climate change.

Australian Conservation Foundation campaigner Freja Leonard said the fastest way to manage the state’s carbon budget was “cutting emissions off at the source”. She said the foundation welcomed the commitment not to consider greenfield coalmine applications.

“The NSW government should now plan for the orderly phase-out of coalmining and support for coal workers.”