Government agencies are aiming to force Clive Palmer's Queenland Nickel out of business due to a $36 million carbon tax bill, The Australian reported.
The original carbon tax bill was $6.2 million in the 2013 financial year, but interest and penalties applied since have lifted the amount to $35.8 million.
Mr Palmer has launched a High Court case to have the carbon tax declared unconstitutional.
Queensland Nickel is the only company, of the 370 the carbon tax was applied to, that has not paid.
The Clean Energy Regulator is exploring a plan to sue for the cash, which would capture Queensland Nickel and its directors, including Mr Palmer.
Mr Palmer has dismissed concerns about a conflict of interest between his role as federal MP for the Queensland seat of Fairfax and a private business owner who refuses to pay the carbon tax.
Companies that do not pay their carbon tax bill on finish with a debt of 130 per cent of the original, with 20 per cent interest added annually.
Even if the Abbott government is able to repeal the carbon tax, Queenland Nickel's bill will continue to increase unless the repeal is applied retrospectively as Mr Palmer is trying to achieve.