Billionaire Andrew Forrest has spoken out against the federal government's safeguard mechanism legislation which would allow big polluters to offset their emissions.
The mining magnate and green hydrogen proponent has urged Australia to take bold steps to transform its energy sector after the United Nations warned "warp speed" action was needed to prevent a climate catastrophe.
Dr Forrest says the findings of the Intergovernmental Panel on Climate Change (IPCC) reinforce that the world is facing an existential threat.
With the government of Prime Minister Anthony Albanese seeking to pass changes to the safeguard mechanism, the Fortescue Metals Group chairman questioned why polluting companies would be allowed to buy unlimited carbon credits.
"We're not supporters of changes that enable companies to buy offsets, because this is just an easy means to cover obligations," Dr Forrest told AAP from Hong Kong, where he addressed the Credit Suisse Asian Investment Conference.
"I've had the major fossil fuels companies of the world try and argue with me that they can go zero net carbon per barrel of oil just by buying offsets. Which is code for 'we're not going to change a thing, we're just going to buy these half-real carbon credits'."
The government's legislation targets the nation's 215 biggest polluters and aims to reduce emissions by 205 million tonnes by 2030.
Dr Forrest argues Australia could "comfortably" supply all of its baseload power from renewable energy by then, using existing natural gas facilities in a firming capacity until it could be replaced by green hydrogen.
"To have a country as good as green by 2030 would be a remarkable achievement but for Australia, very, very real," he said.
"Because we have all the sun and wind we could possibly ever need and we have an exponentially multiplying renewables sector which just needs encouragement."
Developed countries are being urged by the IPCC to commit to reaching net zero emissions by 2040, a decade earlier than most have promised.
The massive $US500 billion ($A747 billion) Inflation Reduction Act unveiled in the United States has been hailed as a game-changer for renewable energy given it offers generous tax breaks for green hydrogen production.
Dr Forrest, whose green-energy firm Fortescue Future Industries has increased its investment in the US, said there was no reason why similar subsidies couldn't be provided on a smaller scale in Australia to capitalise on its abundant renewable energy capacity.
His massive iron ore business has previously outlined ambitious multibillion dollar plans to achieve zero emissions by 2030.
