Debate will resume in federal parliament on plans to lower the emissions of the country's biggest polluters, despite uncertainty clouding the future of the scheme.
The government 's safeguard mechanism would lead to the biggest 215 polluters forced the cap their emissions, with companies breaching limits forced to buy carbon offsets or trade emissions with other companies.
While debate will continue in the lower house, the mechanism does not yet have support to pass the Senate, with the Greens still not backing the scheme.
Greens leader Adam Bandt said the mechanism as it stands would not lead to lower emissions due to new coal and gas projects being able to be included.
Mr Bandt has urged the government to stop new fossil fuel projects in return for the party's support for the safeguard mechanisms.
Negotiations between the government and the Greens are ongoing.
The government will need the support of the Greens and at least two crossbenchers to pass the mechanism through parliament.
A Senate inquiry report into the scheme was handed down on Monday.
The report recommended the bill pass, but the Greens said in their dissenting report that pollution would go up.
Prime Minister Anthony Albanese has ruled out a ban on new coal and gas projects, arguing they were still needed as part of a transition to 82 per cent of the energy grid being renewable by the end of the decade.
The government said the safeguard was critical to meet its emissions reduction target of 43 per cent by 2030 and net-zero by 2050.
