September 30 was a busy day. It was the day that ANZ signed off on secret loan for the refurbishment of the highly polluting Muja A&B power stations in Western Australia, citing reputation risk as the reason for the confidentiality clause.

Thanks to some more snooping by the AFR yesterday, it turns out that National Australia Bank (NAB) was also in on the deal. Coincidentally, September 30 was the day that NAB achieved its goal of becoming “carbon neutral”.

It must have a been a great day for NAB. According to its carbon neutral report, “over 800 employees belong to Green Teams and many more are doing their part to improve our environmental performance”.

It’s a shame nobody told the guys who manage the loan book.

While the rest of the staff were no doubt celebrating in their five-star green building with organic carrot juice and celery sticks, the blokes in the project finance team were signing off on a loan to help refurbish a 40-year-old polluting monstrosity. When up and running, Muja A&B power station will have an emissions intensity of about 1.3 tonnes of greenhouse pollution per MWh of energy produced — making it one of the dirtiest power stations in the country after Hazelwood.

The refurbishment of Muja raises serious questions about the ongoing vacuum in federal climate policy and the value of Julia Gillard’s pre-election commitment that “no more polluting coal plants will be built in Australia”.

Refurbishing a mothballed old plant to bring it back on line is effectively the same as building a new plant — except that it is generally cheaper to do, and the plant is likely to be far more polluting — as in the case of Muja.

If we were serious about cutting emissions and transforming the energy sector, we’d just prohibit new coal power stations and refurbishments such as Muja.