The Queensland Government has banned underground coal gasification (UCG), a process of converting coal to gas by burning coal underground, due to concerns over environmental impact in Australia.

Queensland State Development Minister and Minister for Natural Resources and Mines Dr Anthony Lynham announced the underground coal gasification ban with immediate effect.

Lynham said that a legislated ban will be introduced by the end of the year. .

Lynham added: "We have looked at the evidence from the pilot-operation of UCG and we’ve considered the compatibility of the current technologies with Queensland’s environment and our economic needs.

"The potential risks to Queensland’s environment and our valuable agricultural industries far outweigh any potential economic benefits."

The move without consultation comes after UCG pilot company Linc Energy recently committed for trial in the District Court on five counts of causing serious environmental harm.

Queensland Environment Minister Steven Miles said that the government is also considering steps to address issues raised during the UCG pilots.

Miles added: "The investigation of Linc Energy is the largest and most expensive case ever handled by the State’s environment regulator, the Department of Environment and Heritage Protection (DEHP)."

Meanwhile, Carbon Energy, which has invested A$150m ($115.23m) for the development of UCG technology, is considering a response to the ban.

Carbon Energy vhairman Dr Chris Rawlings said: "The announcement is disappointing as it fails to acknowledge the unique position of Carbon Energy’s keyseam technology and that the Company demonstrated that it can operate the its technology in an environmentally responsible and safe manner.

"It will mean the loss of another Queensland developed innovative technology forced to look off-shore to commercialize its technology at a time that the Government is claiming to support innovation."