The Queensland government warns it may block the Turnbull government's signature energy plan, saying that it won't sign any deal that undermines the state's ambitious renewable energy target.
Anthony Lynham, the state's energy minister, told Fairfax Media that backing for the National Energy Guarantee hinges on whether Queensland's target of making 50 per cent of its electricity renewable by 2030 will not be affected.
"That for us is the deal breaker," Dr Lynham said. "We are looking at it very carefully."
The minister's comments come as Labor state governments prepare to thrash out a common position on the energy policy with their federal counterparts ahead of an August 10 deadline set by the Turnbull government. All states and territories must sign up for the scheme, backed by Energy and Environment Minister Josh Frydenberg, to proceed.
Energy ministers and their department officials from the Queensland, Victorian, and ACT Labor-led governments are hoping to unify their position with Labor's federal climate spokesman Mark Butler within coming days.
Dr Lynham said his government had also held two major roundtables with key stakeholders - from environmental groups, the resources and renewable energy industries - that raised other concerns about the plan.
These include the transparency of the registry the Turnbull government wants to set up to gather information on the emissions intensity of electricity generated. Stakeholders wanted third-party access to help participants in the market, Dr Lynham said.
The government and its appointed Energy Security Board this week released their final design papers to the states and territories on a policy that aims to cut emissions from the power sector while lowering electricity prices and bolstering the reliability of the grid.
Ministers from Labor-run regions have largely declined to state publicly their concerns while their offices go through the scheme's final version in detail.
Analysts such as Bruce Mountain, director of the Victoria Energy Policy Centre, have described the mechanism underlying the energy scheme as "terrifically complex" and deliberately designed to mask the emergence of carbon price.
Dr Lynham, though, praised Mr Frydenberg's openness to discuss the policy and his availability for direct conversations.
The Queensland minister pointed to Mr Frydenberg's concessions to allow a review of the scheme by 2024 - rather than wait a whole decade - and the limiting of offsets for polluters to just 5 per cent and exclusion of international carbon credits as examples.
One ongoing issue for broad-based Labor approval, though, is likely to remain the emissions target.
Under the proposed plan, the electricity sector would track Australia's overall carbon reduction plan - at the lower end of the 26-28 per cent cut on 2005 levels by 2030 - as pledged at Paris.
Mr Butler on Wednesday described the target as "pathetic", not least because the board predicted the sector would have achieved a 24 per cent reduction by the first year of the guarantee, in 2021.
"[It's] a design that will see jobs and investment in renewable energy smashed, it will see no cuts in unhealthy pollution from our power plants, and it will see wholesale power prices 25 per cent higher than they should be," Mr Butler told ABC 24.
Dr Lynham said the August 10 deadline was unlikely to amount to the final sign-off of the scheme. Queensland would need to see the legislation planned for the Federal Parliament before it could give its final support or otherwise.
Fairfax Media also sought comment from the Victorian and ACT governments and Mr Butler.