Australia has been warned to improve a signature climate tool if it wants to cut highly toxic methane emissions.
The unlimited use of carbon offsets by methane-emitting facilities under federal Labor's proposed safeguard mechanism is "irretrievably flawed", according to a report by a leading environmental scientist.
It would allow carbon credits to offset methane emissions on a false basis, the report commissioned by the Lock the Gate Alliance found.
Three independent reports - by Energy Resource Insights, Climate Analytics and Reputex - have found likely new coal and gas entrants risk blowing the mechanism's 2030 emission reduction goal of 100 million tonnes.
The latest report, released on Friday, said requiring gas and coal mines to avoid methane emissions and restricting new entrants is the only credible path that will lead to genuine emissions reductions under the scheme.
Report author Ian Lowe found allowing any new coal mines or gas fields would be "criminally irresponsible".
The draft bill would require industrial emissions to fall by 4.9 per cent each year on average, and plants that cut more deeply than required would be issued with so-called safeguard mechanism carbon credits as a reward.
The proposed safeguard mechanism requires the 215 biggest polluters to cut emissions onsite - including coal and gas mines and liquefied natural gas processing plants - or use carbon offsets to comply.
Professor Lowe said methane from coal, oil and gas production is 85 times more potent than carbon in the short term.
He said mandating real-time monitoring, reporting and verification at every site with real-time public reporting could lift integrity and confidence.
His report also supports putting a limit on methane emitted during production, and mandatory reporting of actual emissions rather than national averages.
Tim Buckley, energy analyst at independent think-tank Climate Energy Finance, said the report highlights the critical need to differentiate between methane and carbon dioxide, and endorses an emissions budget as an additional safeguard.
Setting a maximum limit on emissions for this decade would mean new entrants would be determined within that budget, and not freely added to national emissions.
According to the research, the 100-year time-frame used by the federal regulator obscures the immediate and outsized warming impact of methane-emitting heavy industry - also recently revealed by an international analysis.
Prof Lowe's report showed direct methane emissions from fossil-fuel facilities made up 70 per cent of total greenhouse gas emissions covered under the proposed mechanism when the global warming impact was calculated over 20 years.
Australia is a recent signatory to the Global Methane Pledge for a 30 per cent cut in methane emissions by 2030 across energy and resources, agriculture and waste.
Separately, the International Energy Agency has called for methane emissions to fall by 75 per cent by 2030.
The IEA also found methane from energy production was almost two-thirds (63 per cent) more than federal government estimates.
