The Albanese government will scrap changes to the Australian Renewable Energy Agency introduced in the dying days of the Morrison government that would have allowed it to fund some fossil fuel developments.
The climate change minister, Chris Bowen, will release a new set of regulations on Friday that he said would ensure Arena was focused on funding renewable energy and technology that supported it.
He said it would include a mandate for the agency to work with industry to accelerate electrification – moving from gas to running increasingly on renewable energy – and boost energy efficiency.
It came as negotiations continued between Bowen and crossbench MPs on Thursday over a separate climate change bill that includes Labor’s target of a 43% cut in greenhouse gas emissions by 2030, compared with 2005 levels.
The Greens leader, Adam Bandt, said he was disappointed that Anthony Albanese had reportedly told News Corp that banning new Australian coal and gas mines would lead to an increase in global emissions, not decrease them.
Albanese suggested that a moratorium, as proposed by the Greens, would result in more fossil fuels being exported from countries that had “less clean” resources than Australia. He said Labor’s policy remained that fossil fuel exporters in Australia should not face more onerous laws than overseas competitors.
Bandt said the prime minister had used the same “pro-coal talking points” employed by his predecessor, Scott Morrison, who Labor repeatedly accused of not taking the climate crisis seriously.
He said just as Labor would not leave aged care standards or minimum wages to the market, the government should be willing to intervene on fossil fuels, and not leave “the very future of humanity in the hands of coal and gas corporations”.
“Every tonne of coal burned harms Australia and makes the climate crisis worse,” Bandt said. “The world’s scientists, the UN secretary general, our Pacific Island neighbours and the International Energy Agency have all said that there can be no new coal and gas projects if we’re to prevent catastrophic climate change.”
The recasting of the rules governing Arena follows the previous emissions reduction minister, Angus Taylor, making a last-minute change before Morrison called the May federal election.
Taylor’s change was to allow the agency to fund a broader range of technology in line with the Coalition’s low-emissions technology roadmap. They included developments that used carbon capture and storage, such as “blue hydrogen” made with gas.
It was the third time the Coalition had tried to change Arena’s mandate. The previous two were blocked in the Senate after Labor, Greens and some crossbenchers argued a renewable energy agency should not fund fossil fuels.
Bowen said on Thursday that Labor wanted Arena focused on supporting renewable and related technology to help increase the share of renewable energy generation to 82% by 2030. It currently provides about 33% of the east coast grid’s electricity.
“The best way to put downward pressure on energy prices is to ramp up investment in renewables and that is exactly what we are doing,” Bowen said.
He said the new Arena rules would let it support food manufacturing and mining companies phasing out fossil fuel technologies and back new infrastructure such as electric vehicle chargers.
The chief executive of the Clean Energy Council, Kane Thornton, said reversing the Coalition’s “dilution” of Arena was an important step to “restore the integrity of Australia’s most critically important renewable energy agency”.
Bowen met again with independent MPs on Thursday to discuss Labor’s climate bill ahead of parliament opening next week.
Guardian Australia understands the minister signalled he was prepared to strengthen the legislation by including language that would increase transparency and accountability around advice the government received from the Climate Change Authority.
Under the legislation, the authority would be required to provide regular advice on progress in meeting Australia’s emissions reduction targets. Some independents want more clarity about what advice the minister will seek, and have requested that he provide a detailed explanation to parliament if the government deviates from the expert advice.
Independents have argued for a ratchet mechanism in the bill to ensure that Labor’s 43% emissions target could be increased over time. Bowen tried to convince crossbenchers that the legislation already contains a ratchet mechanism because it is linked to the Paris climate agreement, which requires countries to increase their targets every five years.
Bowen indicated he would take a revised proposal to caucus next week ahead of the introduction of the legislation.
Labor has the numbers to pass the legislation in the House of Representatives, but will need the support of the Greens and ACT independent David Pocock in the Senate.
The Greens support a 75% cut in emissions by 2030, pointing to scientific advice that a 43% cut is not enough for Australia to play its part in meeting the goals of the Paris agreement. But Bandt has said the party is open to supporting the legislation if Labor is prepared to make changes to other parts of the bill.
