An Australian coalmine has nearly doubled its greenhouse gas emissions in two years without penalty under a Coalition climate policy that promised to put a limit on industrial pollution.

Mining company Anglo American was given the green light to increase emissions at its Moranbah North mine, in central Queensland, twice since 2016, according to documents released under freedom of information laws.

The pollution increase was approved under a scheme known as the “safeguard mechanism”, which promised to ensure cuts paid for by taxpayers through the government’s “direct action” emissions reduction fund were not just wiped out by rises elsewhere.

The documents show Anglo American was approved to increase its annual emissions from 1.3m tonnes to more than 2.3m tonnes a year. An equivalent cut in carbon pollution to offset that increase would have cost taxpayers $13.7m.

The Australian Conservation Foundation, which received the documents, said the failure to impose a hard pollution cap on big companies was the main reason national emissions were rising each year at odds with the government’s pledge at the Paris climate summit.

The documents show Anglo American exceeded its safeguard limit of 1.30m tonnes in 2016/17 and would have been required to buy carbon credits to make up the difference but applied to the Clean Energy Regulator, which administers the scheme, to have its baseline retrospectively set at 1.36m tonnes. The change was approved in January 2018.

In 2017/18, emissions from the site jumped to 2.33m tonnes, a 71% increase in a year. The company was granted a new baseline, confirmed in February this year, that allows it to emit 6.7m tonnes over the three years to June 2020.

An earlier analysis by consultants RepuTex found heavy industrial sites covered by the safeguard mechanism had, in total, been approved emissions limit increases of nearly a third.

Gavan McFadzean, the Conservation Foundation’s climate change and clean energy program manager, said the Anglo American case showed the government’s climate policies were failing. “For years, experts have warned the so-called safeguards are full of holes and the pollution increase without penalty at Moranbah North is evidence of this,” he said.

McFadzean said loopholes in the safeguard mechanism should be eradicated and emissions limits reduced over time, as recommended by government agency the Climate Change Authority.

“This is a bare minimum first step towards a comprehensive Australian climate change strategy that will bring down our pollution to zero by 2050,” he said.

The emissions reduction minister, Angus Taylor, did not directly address questions about the purpose of the safeguard mechanism. In a statement, he said the government was spending $3.5bn on a climate solutions package and had mapped out how it would deliver its Paris commitment. “We will meet our international obligations without wrecking our economy or offshoring jobs and industry,” he said.

Moranbah North is a 20-year-old underground mine in the Bowen Basin that produces coking coal for export. More than 90% of its emissions are methane, a potent but relatively short-lived greenhouse gas, released during mining.

A spokeswoman for Anglo American said the company had invested in methane capture technology over the past five years, including using the gas for electricity for about 120,000 homes. She said the company supported the operation of the safeguard mechanism and that it was designed to accommodate economic growth.

“[It] recognises that as operating conditions materially change at a mine, the comparison point or baseline should be adjusted. In the case of Moranbah North, production has doubled and we are mining in an area that is geologically twice as gassy,” she said.

While emissions rise in the industrial sector, the government is struggling to attract interest in its main policy supposed to cut pollution, the emissions reduction fund. At its most recent auction it signed only three contracts for projects that, combined, promise to deliver only 0.06% of the cuts that Scott Morrison says the fund will achieve by 2030.

The Coalition has shifted how it describes the safeguard mechanism since it was introduced. In 2016, the then environment minister, Greg Hunt, said it would ensure the emissions reduction fund was not offset by significant increases above business-as-usual levels elsewhere in the economy. A policy document released in February said the mechanism required Australia’s largest emitters to “measure, report and manage” their emissions, not that it would limit pollution.

When the scheme began most sites received baselines equivalent to their highest pollution level between 2009 and 2014. Companies that went beyond their baseline had to buy carbon credits to offset the breach. This has happened in a handful of cases.

But companies could also apply to increase their baseline if their production levels were expected to rise or they had started operating more recently. After consulting with industry, the government announced in March it would allow all companies to adopt a calculated baseline to “improve operation of the scheme, reduce costs for business and make it fairer and simpler”.

Labor promised before the election that if elected it would reduce industrial emissions covered by the safeguard mechanism by 45% by 2030 by setting tougher limits, but did not spell out how it would have reached the goal.

The Coalition does not have a target for the safeguard mechanism, and appears to have dropped Greg Hunt’s plan for it to be used to cut industrial emissions by 200m tonnes between 2020 and 2030.

The government has a national target of a 26-28% cut by 2030, but most analysts believe it will not reach the target under current policies. Scientists say even this target is not enough for Australia to be playing its part in meeting the goals of the Paris agreement.