As the world takes action to meet the emissions reduction targets agreed to under the Paris Agreement in 2016, the International Energy Agency is forecasting a decline in thermal coal demand. Australia is the world's second-largest exporter of thermal coal and more than two-thirds of Australia's thermal coal exports comes from NSW. Several regional communities in NSW and Australia are highly dependent on the coal mining industry and could be disproportionately impacted by the global shift away from thermal coal.

Several countries have committed to a "Just Transition" to renewable energy that is fair for local workers and communities in coal regions. In March 2019, NSW independent MPs Alex Greenwich, Greg Piper, and Joe McGirr called for the establishment of a transition authority and a 10-year adjustment strategy for coal mining communities in NSW. The Legislative Assembly Committee on Environment and Planning is currently examining this issue as part of its inquiry into the sustainability of energy supply and resources in NSW. On 24 June 2020 the NSW Government also released its Strategic Statement on Coal Exploration and Mining in NSW which identifies four areas of action to address the transition to new energy sources.

This research paper discusses the options available for managing economic transition in NSW regional communities affected by a decline in the coal mining industry. It first provides an overview of the current state of the coal mining industry in NSW and Australia. It then outlines the outlook for the industry based on international trends and forecasts for coal demand and the adoption of renewable energy. The final section examines current policies in NSW for transitioning coal regions, outlines the positions of key stakeholders, and provides case studies of approaches to transition that have been deployed in the Latrobe Valley in Victoria, the Ruhr in Germany, and in Canada.