A mining company has told a parliamentary committee Victoria needs to make more productive use of its coal reserves.
Exergen is lobbying the State Government for the right to mine one billion tonnes of coal in the Latrobe Valley.
It has plans to dry the brown coal and export it to India or use it for power generation.
Exergen chief executive Jack Hamilton says the Government can create thousands of jobs and generate billions of dollars in revenue if it makes more coal available.
"We want to have confidence that if we do what we say and the technology proves out, that we are able to develop a commercial project," he said.
"We need to understand that coal will be available to us in commercial quantities."
Mr Hamilton says the company is only seeking a small portion of what's available in the Latrobe Valley.
"That's only a small amount of the 33 billion tonne of developable resource that the Government does actually hold in the valley," he said.
Environment Victoria spokesman, Mark Wakeham, says the allocation Exergen is seeking would create the biggest coal mine in Victoria.
He says the State Government should focus on renewable energy sources rather than granting mining licences to companies like Exergen.
"Their proposals to clean up brown coal only get it to a similar standard to black coal," he said.
"So it would still be an incredibly polluting product and its not in our interests to be developing an export industry based on this product."