Oil and gas company Linc Energy has been placed into administration in a bid to avoid penalties for polluting the environment, a Queensland green group says.

It was announced late Friday that administrators PPB Advisory had been called in to work with Linc's management on options including a possible restructure.

In a statement to the ASX, the company said after receiving legal and financial advice and considering commercial prospects the board decided it was in the best interests of the company to make the move.

It comes one month after the company was committed to stand trial on five charges relating to breaches in Queensland's environmental laws at its underground coal gasification site.

The state's environment department accused the company of wilfully causing serious harm at its trial site near Chinchilla on the Darling Downs.

Drew Hutton from the Lock the Gate Alliance said the company could face up to $56 million in fines if found guilty, but the penalty might never be paid.

"It is going to be difficult to get any money out of this company now that it is in administration," he said.

Mr Hutton said going into administration was a common legal manoeuvre to dodge fines and costly clean-ups.

"The problem is, there are many others, especially coal mine sites, around the state where this exact same thing could happen," he said.

"We have already seen at Clive Palmer's nickel refinery near Townsville, they have gone into administration with a rehabilitation bond, and there are many other mines around the state with inadequate bonds."

A report by not-for-profit law firm Environmental Justice Australia has found mining companies are using legal loopholes to delay or minimise their rehabilitation obligations.

Linc Energy argued the case against it was circumstantial and that it is innocent.

Administrator Stephen Longley said they were focused on working with Linc to review the company's operations and assets in Australia and the United States.

"We are confident that upon completion of this review, we can work towards establishing a deed of company arrangement that has the potential to facilitate a future restructure of the business," he said.

Move shows laws are justified: Environment Department

Queensland Environment Minister Steven Miles said this was a prime example of why the Government introduced "chain of responsibility" laws in a bid to make it easier to recover the costs of environmental clean-ups if a company crashes.

"We need better laws to ensure companies can't avoid their environmental obligations," he said.

"The Government has put those laws before the Parliament. Surely this case, on top of all of the others, must convince the Springborg Opposition and all MPs that these laws are justified."

The LNP's environment spokesman Stephen Bennett said while his party supports the idea behind the bill, the amendments are an overreach and will target the wrong people.

"You could have an Indigenous group as a land owner, you could have a farmer who's done a commercial agreement with a coal seam gas company, you could have financiers, you could have lawyers, you could have an executive director who's actually sold the company some 10 years ago still be now liable under this overreach in this bill," he said.

Deputy Opposition Leader John-Paul Langbroek said the State Government's proposed new laws set out to prevent Queensland from bearing the brunt of clean-ups such as at the site of Mr Palmer's Queensland Nickel refinery.

Mr Langbroek said the law covers mines, but not refineries.

"It's inadequate. In the legislation it refers to mining and yet this is a minerals processing plant, so it doesn't even affect the Clive Palmer issue here," he said.