Natural Resources and Mines Minister Dr Anthony Lynham said the risks UCG posed outweighed any potential positives.
“In 2009, the Queensland government established a process for three companies to trial UCG operations on a small scale,” Lynham said.
“An independent scientific panel report on the pilot trials found that sufficient scientific and technical information was not yet available to reach a final conclusion about the operation of this industry on a commercial scale.
“Issues associated with two of the three trial projects and the uncertainty about commercial scale operations, have highlighted significant risks with this industry which are just not acceptable.”
UCG involves converting coal to a synthesised gas by burning coal underground. The syngas is processed on surface to create products such as aviation fuels and synthetic diesel.
It is a vastly different process to coal seam gas production, which is successfully managed in Queensland within the regulatory framework, according to Lynham.