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AAP
AAP
Business
Alex Mitchell

Fossil fuel embargo on the table for manufacturing fund

Industry Minister Ed Husic says the manufacturing fund will help Australia hit net zero emissions. (Bianca De Marchi/AAP PHOTOS) (AAP)

The government hasn't ruled out doing a deal on fossil fuels funding to get its flagship manufacturing plan off the ground.

Labor is relying on the Greens for Senate support to introduce the $15 billion National Reconstruction Fund, but the minor party is demanding that no coal or gas projects will be funded via the program.

Industry Minister Ed Husic said he wouldn't exclude making the provision as the government negotiated with the Greens after the coalition announced it would oppose the fund.

But he said the project, which he labelled the "biggest investment in manufacturing capabilities in living memory", carried potential climate benefits.

"It gives us great opportunities not only for jobs, but for things like reducing emissions via the manufacturing of green tech," he told ABC radio on Wednesday.

"It's about manufacturing, it's not about the type of things they've been raising ... we'll work through those issues."

The plan would form a key pillar of the government's push to reach net zero emissions by 2050, Mr Husic added.

The coalition has criticised the fund for allowing the minister too much discretion, but the minister said the opposition's stance was a "knee-jerk reaction" and it had not raised the issue previously.

"For communities represented by Liberals and Nationals ... it will be interesting for them to know why their members of parliament don't back manufacturing," Mr Husic said.

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