Newcastle environmentalists have scoffed at claims by a new player in the Hunter's coal industry that a process, known as veneering, cuts emissions from coal wagons by 80 per cent.
New Hope has agreed to buy 40 per cent of Rio Tinto's Bengalla mine.
In Queensland it covers its coal wagons with an environmentally-friendly veneering solution, which forms a crust and stops dust from being released.
Residents around Newcastle's rail freight corridor have complained about dust from coal wagons for several years, calling for covered wagons.
James Whelan from Environmental Justice Australia said veneering does not work.
"There are parts of Australia where veneering or spraying the top of coal wagons is the practice, and it claims to reduce particle pollution," he said.
"But there is no independent evidence that it actually has that effect, and best practice is to cover the lids completely.
"Cover those wagons with a metallic or fibre glass lid."
Mr Whelan said covering wagons is the only thing that works.
"In a number of parts of Australia, new coal mines and new coal terminals will control their dust emissions by fully covering coal wagons," he said.
"That is also the practice in parts of the world, like Oakland, where a new coal terminal will have covered coal wagons.
"Here in the world's largest coal port surely we deserve best practice."