Greens and Labor do deal on climate action including ‘hard cap’ on emissions of major polluters

The Greens will support the Federal Government’s signature climate change policy after striking a deal that includes imposing a “hard cap” on emissions from major polluters.

Greens leader Adam Bandt said the minor party had secured 13 concessions from the Albanese Government in exchange for backing its overhaul of the so-called safeguard mechanism, which amounted to a “major hit” on coal and gas.

Mr Bandt claims the concessions — which includes a “pollution test” for new projects — will torpedo “many” of the 116 coal and gas proposals in the developments pipeline across the country.

In a warning to the resources sector, including proponents in WA, Mr Bandt declared the Greens were now “coming for the rest”.

The deal has raised immediate questions about the future of major projects — including the Scarborough gas development.

Prime Minister Anthony Albanese and Climate Change and Energy Minister Chris Bowen are downplaying the potential repercussions, flatly rejected the suggestion its deal with the Greens would push up power prices by killing off investment in fossil fuel projects.

But the Coalition has lashed the deal, accusing Labor and the Greens of putting a “hard cap on the growth of the Australian economy”.

The agreement, which follows weeks of public slanging between Labor and the Greens, came as the Bill passed the Lower House on Monday morning.

The support from the Greens means the Government needs the votes of just two more crossbenchers to get it across the line in the Senate.

The Greens were threatening to sink the Bill unless Labor agreed to a blanket ban on new coal and gas projects.

The minor party ultimately backed down from that stance, settling for a raft of changes that should make it tougher for new projects to get off the ground.

The package includes setting a “hard cap” on total emissions from polluters captured under the safeguard mechanism.

If new or expanded projects are projected to blow the emissions budget, then the Climate Change Minister could intervene to change the rules.

Mr Bowen would not speculate on how the powers could be used, telling reporters that “others can reach conclusions about the implications”.

New gas wells will also be required to be net zero from the start of operation.

“This is a big hit on coal and gas that has been delivered by the Greens,” Mr Bandt said.

Mr Albanese lauded the deal as “a great day for our environment, for jobs and for the economy”, along with everyone who voted for stronger action on climate change at last year’s Federal election.

“I believe that we have a responsibility to participate and to achieve real solutions, to achieve real outcomes, to protect our manufacturers, to grow our economy while we’re dealing with emissions reduction,” he said.

“We have a huge opportunity to be a renewable energy superpower.”

The Government also agreed to set aside an extra $400 million to support hard-to-abate sectors including cement, steel and aluminium.

The funding is on top of $600 million to ensure industries facing overseas competition are not worse off.

The Coalition’s opposition to the Bill intensified after the Labor-Greens deal was announced.

“It’s one thing to decarbonise the Australian economy but you don’t want to decapitate it on the way,” shadow climate change and energy minister Ted O’Brien said.

“The deal that the Labor Party has done with the Greens today is far worse than I had anticipated.”