BHP Billiton has scrapped plans to build a major new coal port on the Queensland coast, as a new report warns that the state’s haste to expand existing ports is misguided and could result in job losses.

BHP said it has pulled out as developer of terminal two at the Abbot Point port, near the Queensland town of Bowen, as well as an accompanying rail line that would have taken coal from mines to be exported.

The $5bn plan, which would have transferred up to 60m tonnes of coal a year to Abbot Point for export, was expected to begin in 2015. But BHP put the development on ice in September and has now abandoned the idea.

“Formal relinquishment of the right to develop T2 has now been agreed with North Queensland Bulk and the company will formally withdraw from related regulatory applications,” a BHP spokeswoman said.

The decision was taken against a backdrop of falling global coal prices and existing port capacity at Hay Point.

A report by the Centre for Policy Development has found there is an excess of port capacity along the Queensland coast, raising concerns that the push to expand ports at Abbot Point, Gladstone and Townsville could put the state “at risk of stranded assets in the long term”.

The study found coal ports to be operating at 65% of capacity, 20% lower than the long-term industry average.

It stated that investment banks such as Goldman Sachs were “losing confidence” in Australian coal investments, with the international coal price dropping 22% since 2010.

According to the report, many of Queensland’s proposed projects require a coal price of $120 a tonne to be viable. The current price is about $77, with the World Bank forecasting a $70-a-tonne average until 2020.

Laura Eadie, author of the report, said the Queensland government was stuck in “boom time thinking” by pushing to pare back environmental approval times and approve further ports.

“The government seems to expect quite significant exports, which is opposed to the view of rational listed coal investors,” she told Guardian Australia. “China is capping coal consumption by 2015, which is significant as it has been the main driver of coal export growth.

“If Queensland goes ahead and develops and dredges Abbot Point, it may all be for nothing. There is a risk of stranded assets, job losses and royalty shortfalls.

“There is enough coal port capacity until at least 2017. It’s unlikely that there will be further capacity required until 2020, so the question is, why the rush? The Queensland government has the time to plan this properly in an environmentally sensitive way.”

In June, Unesco warned that the Great Barrier Reef will be placed on the World Heritage “in danger’ list unless development alongside the ecosystem is restricted to existing ports, with any expansion careful to not damage the reef.

Environmentalists warn that dredging and dumping of seabed to expand ports will significantly harm marine life. There are also concerns that increased shipping through the reef will cause harm, although most scientists point to the impact of chemical run-off, severe weather events, a plague of coral-eating starfish and climate change as the main threats.