The Labor party will not agree to last week’s compromise on the renewable energy target unless the government drops its demand to review the scheme every two years, it said Tuesday.

Labor and the government last Friday reportedly reached an in-principle deal to aim for 33,000 GWh of electricity from renewable sources in 2020, down from the currently legislated 41,000 GWh.

But Labor on Tuesday backed down, citing the government’s demand that the target be reviewed every two years, which has sparked outrage in the industry due to lack of regulatory certainty.

“There cannot be a deal if the industry is saying this review process means investors won’t put money on the table,” Mark Butler, Labor’s shadow climate change minister, told reporters.

Investment in Australia’s renewable industry has all but dried up since a government-appointed panel last year proposed the target be lowered to 25,500 GWh, causing a one-year stalemate between the ruling Liberal party and Labor.

If a compromise is reached that includes a review every two year, the target will be put under consideration again already next year.

“Two year reviews are a poison pill that the industry can’t afford to swallow,” said Erwin Jackson, deputy CEO of the Climate Institute.

“Uncertainty on climate and renewable energy policy in Australia is going to linger until both major parties can agree on a longer term strategy to clean up our emissions-intensive economy. The only policy that can have stability is one that delivers decarbonisation,” he told Carbon Pulse.

Lack of new investment in renewables and the carbon pricing repeal have contributed to a comeback for coal in Australia’s energy mix that has seen GHG emissions rise 3.1% in the past twelve months.

By Stian Reklev – stian@carbon-pulse.com