Freight rail operators would have to be licensed for their environmental impacts, under a proposal from the state environmental regulator.
The Environment Protection Authority is calling for public submissions on a proposal to impose new regulations on the operators of freight rail, including coal haulage companies.
It would require them to operate under an environment protection licence, which would have enforceable conditions added to it where necessary.
The proposed changes would place direct responsibility on rolling stock operators for their environmental performance and make them accountable to the EPA, allowing the impacts of the industry on the environment to be more directly addressed.
It is unclear how the most controversial aspect of freight rail impacts, the dust from coal trains, would be included in the type of licence the EPA draws up.
"The EPA is currently investigating other ways that trains may be depositing material in the rail corridor which could then be stirred up as a train passes by," EPA chair Barry Buffier said.
"The loading and unloading facilities for coal have been identified as locations where practices can contribute to material entering the rail corridor.
"While there have been no licence breaches relating to the loss of material within the rail corridor, the EPA is working with industry to ensure best practice activities are applied."
The new licensing scheme would initially replicate the licences which now apply to the companies which control the rail systems.
"The proposal is strictly about the framework for how the rail industry will be regulated and does not include specific actions for issues such as particulate emissions from trains," Mr Buffier said.
Conditions relating to dust emissions could be added if evidence showed they were necessary.
Total Environment Centre director Jeff Angel said the EPA's proposal made it clear the freight rail system had inadequate regulation.
"There are three important targets: noise, coal dust and diesel emissions," he said.
"I think dust has been an issue which has not been properly regulated, and the faster they can apply best practice to minimise or eliminate the dust, the better."
Asciano, which as the owner of Pacific National and Patrick Corporation would be significantly affected by the changes, was asked for comment but did not respond.
Coal train dust has for several years been a controversial issue in the Hunter Valley, where there has been more made of the issue than in the Illawarra.
Hunter Community Environment Centre spokesman John Mackenzie said the EPA's proposal was "a step in the right direction".
"We're dealing with the dust and the noise from trains and the current regulation isn't meeting community expectations," he said.
"The main pollution that the community is experiencing from these coal trains [is] from the diesel, the dust, and particulates."