Carbon Energy was formed in 2006 following a joint venture between Metex and the CSIRO to develop and commercialise underground coal gasification (UCG).

As part of the formation of the new company, it was agreed, previous collaborative arrangements regarding ongoing intellectual property rights to UCG and service agreements with the CSIRO would continue.

In May 2008, Carbon Energy committed to the development and construction of its first pilot scale, oxygen injected UCG trial based on a standard 1 petajoule (PJ) per year UCG syngas module at its Bloodwood Creek site, near the Queensland township of Dalby and positioned itself as a significant innovator within the State's energy industry.

At the same time, the Company announced a Memorandum of Understanding (MOU) with Incitec Pivot Limited (IPL) to provide IPL exclusive global rights to the use of Carbon Energy's UCG technology for ammonia and ammonia derived product manufacture.

Since then Carbon Energy has gone on to develop its trial into a commercial reality. In 2011, the Company achieved an Australian first in generating electricity from syngas.

During 2012 to 2013 the Queensland Government appointed Independent Scientific Review Panel (ISP) provided its findings.  The ISP in short provided “in-principle” support and recommended Carbon Energy to decommission and draft a rehabilitation plan in order to demonstrate the full-lifecycle of a keyseam project.

This recommendation set an environmental benchmark for Queensland as no other resources company had been required to complete a full-lifecycle assessment prior to being granted permission to commence a project.
Carbon Energy went on to complete both the decommissioning of Bloodwood Creek and submit a rehabilitation plan which resulted in proving keyseam’s was safe and effective with strong environmental credentials. In July 2016 the Company received formal confirmation from the Queensland government that it had met the recommendations of set by the ISP.  This achievement has been our most important priority since we began trioals at Bloodwood Creek back in 2008.
Off the back of the strong scientific and environmental results achieved in Queensland, Carbon Energy pursued business development opportunities in China where interest in keyseam has been growing. In November 2015 Carbon Energy shareholders approved a joint venture (JV) with its cornerstone investor Kam Lung to develop a China based company focused on exclusively building a gas and technology licencing business in the region.