But the coal industry claims the industry will still be unduly penalised compared to other sectors and will be waging a public campaign to prevent the carbon tax legislation from being passed in parliament.

As reported in ILN on Wednesday, the federal government is expected to provide $1.275 billion of compensation to the industry compared to the $1.5 billion offered by former Prime Minister Kevin Rudd for the carbon pollution reduction scheme.

In a speech to the Canberra Press club this week, Australian Coal Association executive director Ralph Hillman said the coal industry was being discriminated against with the introduction of the carbon tax and the allocation of compensation.

“The proposal incorporates provisions to compensate some Australian consumers and some industries for the costs they will incur as a result of this policy,” he said.

“However, it also exempts some emitters from the tax – including large emitters such as agriculture and motorists.

“You may have seen the advertisements the Australian Coal Association has run in recent weeks in national and regional press.

“As in 2009, we want to explain to people, particularly in coal mining regions, the potential effects of the proposed carbon tax on their lives through its impact on coal mining.”

Steelmakers such as Bluescope Steel, which is based at Port Kembla, New South Wales near the Illawarra coalfields, is expected to get an effective two year reprieve on the carbon tax.

The federal government has already set up programs to assist industry to adapt to the new carbon tax regime and is holding workshops in locations close to the coal fields.

The federal government's Enterprise Connect program will fund workshops on managing carbon costs at the University of Queensland in Brisbane and Mackay in August.

They aim to help businesses create new commercial opportunities and cost savings by improving efficiency, identifying new markets and leveraging available funding in a carbon constrained economy, according to the University of Queensland.

Sessions include calculating a carbon footprint, calculating carbon costs and savings, and identifying new business opportunities as a result of carbon management strategies.

But carbon capture and storage is the key technology for reducing emissions from continued use of coal and gas, and the coal industry has already made a substantial investment in this technology, according to Hillman.

“The Australian coal industry, via its $1 billion COAL21 fund, is working with the commonwealth and state governments on the demonstration of carbon capture and storage in Australia,” he said.

The International Energy Agency estimates the global growth in electricity generation between 1990 and 2008 was 71% and the growth from 2008 to 2035 will be a further 90%, Hillman said.

“Like the past growth, the projected growth will largely be supplied by coal and natural gas.

“The contribution of nuclear and renewables – principally hydro – will grow. But electricity supplied from coal and natural gas will still be nearly three times as much is that from all the renewables combined.”