Incitec Pivot Limited said the gas was a by-product of the plant’s production of ammonium nitrate explosives, which were used in mining.
Incitec Pivot Limited said the gas was a by-product of the plant’s production of ammonium nitrate explosives, which were used in mining.

Failure at Moranbah explosives factory produces potent gas

AN EQUIPMENT failure at a Moranbah chemical plant led to the accidental production of nitrous oxide equivalent to 309,000 metric tonnes of carbon dioxide.

Incitec Pivot Limited revealed in company documents a mechanical failure at its Dyno Nobel plant led to the creation of the nitrous oxide, commonly known as "laughing gas".

The failure resulted in a 10 per cent increase in the company's annual emissions over 2017-18, the Carbon Disclosure Report stated.

The highly potent gas was a by-product of the plant's production of ammonium nitrate explosives, which were used in mining, the report said.

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An IPL Spokeswoman said in the second half of 2018, the maintenance issue resulted in less nitrous oxide being abated per tonne of product. 

"The maintenance issue was not a 'leak' or 'release' to the air, it caused the N20 (nitrous oxide) abatement unit to work less effectively," she said.    

"Moranbah residents can be assured that we measure, monitor and abate both these gases to maintain air quality and reduce greenhouse gases."   

By December 2018 IPL had completed $5.8m in repairs, she said.  

The mechanical error resulted in the company exceeding its baseline target under the Emissions Reduction Fund Safeguard Mechanism, forcing it to surrender 40,724 carbon credit units to the Federal Government in 2018, IPL reported.

The spokeswoman said the carbon credit units were surrendered in early 2019.

But the Australian Conservation Foundation said a loophole in the legislation would mean the company could avoid its multimillion-dollar carbon credit bill.

Nitrous oxide is a by-product of the Dyno Nobel plant’s production of ammonium nitrate explosives, which are used in mining.
Nitrous oxide is a by-product of the Dyno Nobel plant’s production of ammonium nitrate explosives, which are used in mining.

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Climate change program manager Gavan McFadzean said the ability of companies to calculate their emissions over multiple years meant they could avoid paying for pollution spikes.

"Based on prices from the last Emissions Reduction Fund auction, Incitec Pivot's (IPL's) pollution blowout should have cost it $2.8 million in carbon credits, but instead the company was able to simply recalculate its baseline and enter a multi-year monitoring period," Mr McFadzean said.

"Multi-year monitoring is a problem because companies that exceed their emissions limits in one year don't have to buy carbon offset credits to compensate and in many cases they are allowed to recalculate their baselines and pollute more."

Australian Conservation Foundation climate change program manager Gavan McFadzean said the ability of companies to calculate their emissions over multiple years meant they could avoid paying for pollution spikes.
Australian Conservation Foundation climate change program manager Gavan McFadzean said the ability of companies to calculate their emissions over multiple years meant they could avoid paying for pollution spikes.

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The IPL report outlined the Dyno Nobel gas spike would be factored into its financial planning for the 2019-20 financial year.

The spokeswoman added the three-year monitoring period was a standard industry practice and the remaining liability would be settled in February 2022. 

But Mr McFadzean said Australian taxpayers would pick up the tab through increased climate damage.

He said nitrous oxide was 300 times more potent than carbon dioxide and estimated the plant released at least 198,279 tonnes of the gas.

An equipment failure at a Moranbah chemical plant led to the equivalent of 309,000 metric tonnes of carbon dioxide being accidentally released into the atmosphere. Photo: Zizi Averill
An equipment failure at a Moranbah chemical plant led to the equivalent of 309,000 metric tonnes of carbon dioxide being accidentally released into the atmosphere. Photo: Zizi Averill

"Make no mistake, this massive release of super-potent nitrous oxide from Incitec Pivot's chemical plant at Moranbah is making our climate change problem worse," he said.

A spokesman for Emissions Reduction minister Angus Taylor said the Safeguard Mechanism allowed Australia's largest polluters to measure, report and manage their emissions.  

He said IPL had an obligation to ensure that its net emissions remain below its baseline target.  

He did not indicate if there were any plans to amend the multi-year monitoring period system, which allow emitters to exceed its limits in one year as long as average emissions over a two or three year period remain below the baseline.