The charges, laid after a nine-month investigation, carry a maximum penalty of $2.2 million per offence.

"The company is disappointed the department has never attempted to fully understand the underground coal gasification process and these charges are misguided," A Linc Energy spokesperson told APN Australian Regional Media.

"In addition, Linc Energy is disappointed that the department has not afforded it the opportunity to respond to the allegations throughout the 'detailed' investigation."

The spokesman asserted that the company "at all times" complied with groundwater monitoring regulations.

"The charges relate to older-style underground coal gasification technology that Linc Energy was researching several years ago and is no longer pursuing.

"Linc Energy's developed, and commercial-ready, underground coal gasification technology is not included in these allegations."

Linc has not yet been given full approval for its UCG technology by the state government and is currently decommissioning the Chinchilla pilot facility after it completed its research and development program there.

"UCG is a very different process to that used to extract coal seam gas. It involves converting coal to a synthesised or non-natural gas via enforced combustion," Environment Minister Andrew Powell said.

"As a result of this ongoing investigation, the Department of Environment and Heritage Protection has now filed charges against Linc Energy for causing serious environmental harm.

"While the harm allegedly caused to the environment is considered serious, the information available to the department suggests there is no immediate risk to neighbouring landholder water bores.

"The department is continuing its formal investigation into the activities of Linc Energy Limited."

The Lock the Gate Alliance has leapt on the allegations, accusing the State Government of trying to avoid media scrutiny by announcing the charges at 5pm on Friday afternoon.

"Releasing this important information at 5pm Friday and on the night a major cyclone was about to hit the state was obviously designed to ensure as few people as possible read about it," Lock the Gate national president Drew Hutton said.

"This underground coal gasification technology is highly dangerous and the state government should never have allowed it. Any sensible government would ban it now.

Hutton called on the government to release all relevant details including what specific damage was done, and where and when it occurred.