The Albanese government will need to cough up major concessions to either the Coalition or the Greens to have any hope of overhauling federal nature laws after the two parties ruled out supporting the current plan.
The environment minister, Murray Watt, said he was open to working with either side but would not speculate about possible changes, leaving the fate of the promised re-write of the Environment Protection and Biodiversity Conservation (EPBC) Act unknown before its introduction to parliament in the upcoming sitting fortnight.
After weeks of signalling she was open to a deal with Labor, the opposition leader, Sussan Ley, all but ruled out that option on Thursday as she railed against the proposal she dubbed a “red light” for jobs and a “handbrake” on investment.
The Greens separately accused Watt of drafting pro-business laws that were worse for the environment than the existing John Howard-era act, confirming it would not back the government without changes to directly tackle the climate crisis and native forest logging.
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It means Watt has no obvious partner to get the legislation through the Senate, diminishing his hopes of passing the laws before Christmas and raising the prospect that a second attempt to overhaul the EPBC Act could collapse inside 12 months.
Labor was hopeful the Coalition would be more likely to endorse the latest iteration given it was Ley, as environment minister in the Morrison government, who commissioned the Samuel review that inspired the changes.
The abrupt shift in position from the opposition leader and her shadow environment minister, Angie Bell, came after private briefings on parts of the legislation revealed details about Labor’s plan.
Among the opposition’s concerns, which were shared by sections of the mining industry, was a new definition for an “unacceptable impact” on the environment, which would trigger immediate refusal of a project.
Ley claimed the laws could risk approvals for critical minerals projects backed under the deal Anthony Albanese signed with Donald Trump this week in Washington, including the Alcoa-Sojitz gallium project in Western Australia.
Guardian Australia contacted Alcoa, which was of the view the project would be subject to state – not federal – environment laws.
Watt said the suggestion the nature laws could imperil the government’s critical minerals push was “completely wrong” and those peddling it were “being mischievous”.
The Coalition also included the new requirement for proponents to achieve a “net gain” for the environment, and bigger penalties for breaches, among a list of grievances with what Bell described as “nature positive 2.0”.
Nature positive was the tagline for the EPBC reforms that Albanese shelved before the May election amid industry and political opposition, including from the Coalition.
Guardian Australia understands shadow cabinet discussed its general position on EPBC reform earlier this month but was not convened before Ley shifted the Coalition’s position on Thursday.
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Senior Liberal sources say the opposition will push for concrete measures to guarantee faster project approvals as part of negotiations with the government.
If Labor cannot convince the Coalition, the fate of the EPBC reform – an election promise at the past two ballots – rests on landing a deal with the Greens.
The Greens’ environment spokesperson, Sarah Hanson-Young, was on Thursday afternoon resolute that the party would not support laws that don’t “protect our forests and protect our climate”.
The legislation will, for the first time, require heavy polluting projects to disclose their emissions, and how they intend to mitigate them, as part of the assessment process.
But it would not force decision-makers to consider the climate impacts, meaning projects such as Woodside’s North-West Shelf extension could still be approved under the new regime.
“Our concern though is that even if they now have to say how much pollution they’re going to create, the minister can’t do anything with that,” Hanson-Young told the ABC’s Afternoon Briefing.
“He doesn’t have to consider it before he gives them a tick of approval. And that’s just not fit for today’s world when the environment is under huge stress.”