THE State Government is considering exporting millions of tonnes of high-polluting brown coal to developing nations under a plan championed by Energy Minister Peter Batchelor in a recent cabinet meeting.
As hundreds of people gather today in the Latrobe Valley to protest against Hazelwood, the state's dirtiest brown coal power station, a new environmental battle is likely against the Brumby Government over use of the state's massive coal reserves.
Government sources have told The Sunday Age that Mr Batchelor is supportive of an energy company's 40-year proposal to export 12 million tonnes of brown coal annually to India. Mr Batchelor took the idea to cabinet's policy and strategy committee recently.
Spokeswoman for Mr Batchelor Emma Tyner said any allocation of coal would require ''careful consideration of emerging needs and a rigorous environmental approval process''. She said no decision had been made.
The Sunday Age believes that ministers sought more information on the export proposal.
But the company behind the export proposal, Exergen, is confident it will gain access to a new release of brown coal. ''I think we are making good progress,'' chief executive Jack Hamilton told The Sunday Age. ''What we hear is that it is being discussed in Government and hopefully things will come together shortly.''
The company expects to earn $700 million a year in export income for Victoria.
The Energy Minister's support of brown coal exports has infuriated green groups, who see it as a key test of the Brumby Government's environmental credentials. They believe the Latrobe Valley should be moving away from brown coal. ''Any decision to develop a brown coal export industry would go down as one of the worst environmental decisions in the state's history,'' said Environment Victoria campaigns director Mark Wakeham.
Australia's lucrative coal export industry faces a backlash from climate change protesters who believe it should no longer provide the fossil fuel for power stations in fast-growing developing nations. Last year, one of the world's leading climate scientists, NASA's James Hansen, called for a ban on new coal power stations and said the fuel was ''the single greatest threat to civilisation and all life on our planet''.
But the coal industry says lower-emission technologies that reduce and capture greenhouse gases - and make brown coal ''cleaner'' - mean the developing world can satisfy its energy needs with less of a carbon footprint.
Premier John Brumby has backed Victoria's use of brown coal, but says it must be used with clean technology in future.
The Brumby Government has no official policy on exporting brown coal because, until recently, the Latrobe Valley's 33 billion tonnes of usable brown coal could only be used for power plants to generate electricity.
Brown coal had been ruled out as an export because of its high water content and its flammability. But several companies have developed technology that reduces the water content and makes it safer to transport.
Exergen, an Australian-based company with Japanese and Indian corporate partners, hopes to start construction on a de-watering facility next year that would create 350 ongoing jobs.
Opposition environment spokesman David Davis said the Coalition would not rule out backing brown coal exports, but it needed to assess the proposal.
Mr Hamilton declined to provide an estimate of the greenhouse gases that would be produced by Exergen's project. But based on Environment Victoria's calculations, it would produce about 11 million tonnes of greenhouse gases in Indian coal-fired power plants annually.