The Morrison government has rejected recommendations from a think tank for new ways to help major industries achieve net zero emissions by 2050.
The independent Grattan Institute in a report released on Monday recommends a taxpayer-funded Industrial Transformation Future Fund to pay big emitters to reduce emissions.
The industrial sector is responsible for 30 per cent of Australia's emissions, with 80 per cent from just 194 large facilities.
The Grattan report also recommends instant asset write-offs to replace older industrial equipment with newer, lower-emissions plant and machinery to help achieve large-scale industrial transformation.
Instead, Energy Minister Angus Taylor is sticking with plans to subsidise new technology to cut emissions and increase energy efficiency in the industrial, transport and agriculture sectors.
"We have a safeguard mechanism and we'll be using existing structures as per the King review," he told AAP.
Advised by ex-Origin Energy boss Grant King, the Morrison government is inviting industry to have a say on the design of a new so-called safeguard crediting mechanism.
The mechanism will provide credits to business that reduce their emissions, measured off an agreed baseline that critics say is not ambitious enough.
The 2021/22 federal budget allocated $279.9 million to establish the new mechanism recommended by the King review and to support investment in emissions abatement projects.
The Grattan report says firms should be encouraged to reduce their emissions by using technologies that are already available, to buy valuable time and as an insurance policy against delays in commercialisation of new technologies.
Report author and Grattan director Tony Wood also urges state governments to expand energy savings schemes at thousands of smaller industrial sites, building on the success of residential and commercial schemes.
Net zero by 2050 is Scott Morrison's "preferred" policy and the Grattan report says curbing emissions from the biggest emitters now will increase the likelihood of success in the 2030s and 2040s.
"The climate clock is ticking," Mr Wood said.
November's international climate conference in Glasgow will bring together many countries seeking to agree to more ambitious emissions reduction targets.
"Net zero by 2050 is a tough target," Mr Wood said.
"It requires an unprecedented pace of asset replacement and renewal, starting now."
Australia will tell Glasgow that reporting arrangements and the transparency that sits around emissions reduction is a key tool.
The minister says Australia is on track to meet and beat current 2030 targets, and will update projections, as it does every year.
