Pressure is mounting on the Nationals Party to agree to adopt a net zero emissions target by 2050 before Prime Minister Scott Morrison attends the COP26 United Nations conference in Glasgow in November.
Mr Morrison and Nationals leader Barnaby Joyce fielded questions on Tuesday over why a medium-term 2030 target would not be changed despite Australia's promises lagging far behind other those of other countries.
It comes as the European Union's ambassador to Australia warned countries without ambitious climate targets could be slapped with a carbon tariff on imports into Europe.
It has also been revealed the cabinet's net zero policy is being supported by secret modelling, which outlines the policy's impact on commodities for the regions.
But some Nationals senators claimed they had not been shown the full picture.
A final decision from the Nationals on net zero by 2050 would be made by the end of the week, Mr Joyce promised.
And as the Prime Minister insisted net zero was the position of cabinet, Labor attempted to wedge Nationals cabinet ministers over their support for the target.
Under cabinet guidelines, a minister should resign if they cannot publicly support a policy adopted by cabinet.
But Nationals Senate leader Bridget McKenzie, who only returned to cabinet in June, refused to entertain the discussion.
"That is an absolutely hypothetical question. I've been very clear on what the process that has been outlined by the Deputy Prime Minister and the Prime Minister is," she said.
Pressed on whether there were any provisions in the budget for a potential deal, Finance Minister Simon Birmingham pointed to existing funding for hydrogen, carbon storage, and manufacturing.
He did not answer directly when asked whether there was an "upper limit" to how much the Liberals would be willing to pay to secure Nationals support.
But Environment Minister Sussan Ley, a regional NSW MP, said the message coming from rural Australia was "overwhelmingly" in favour of committing to net zero targets.
"There are opportunities for rural Australia in net zero, that the world is transitioning to anyway," she told the ABC.
"We need to be on the front foot to take advantage of those."
While the Nationals framed themselves as the only party representing regional Australia, Ms Ley conceded a rural-metro divide existed within the Liberal party room.
"There are about 30 rural Liberals, even between ourselves we might have different views," she said.
"But it is really good to thrash out the ideas and work out what the bright future can look like."
Earlier in the day, Foreign Minister Senator Payne announced a new ambassador to the European Union would take up the challenging role.
Long-serving diplomat and Prime Minister and Cabinet deputy secretary Caroline Millar will be sent to Belgium to keep a "warm relationship" between the trading bloc and Australia on mutual peace and security issues.
Senator Payne said the EU was important for future trade agreements.
"The EU is Australia's second largest two-way trading partner and second largest source of foreign investment," she said.
"Australia is committed to concluding a comprehensive and ambitious free trade agreement with the EU."
The EU ambassador to Australia Dr Michael Pulch said there was no time for inaction ahead of the Glasgow summit in an opinion piece on Wednesday.
Australia's refusal to budge on its 26 to 28 per cent emissions reductions by 2030 could mean it will face a carbon tax from one of its largest trading partners.
"Putting a price on carbon is essential, one way or another," Dr Pulch said.
"We want to lead by example and engage with partners, but we are prepared to take more action, if necessary."
Labor member for Fenner Andrew Leigh said Mr Morrison needed to drop the targets put forward by former prime minister Tony Abbott and bring the country in line with the rest of the world.
"Tony Abbott, as we know, is a climate change denier who once described climate change as 'absolute crap'," he said.
"Australia is the advanced country most of risk from climate change, yet we're the only advanced country yet to sign up to net zero by 2050."
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