Work will continue on a more detailed design for the Turnbull government's signature energy plan after getting the green light from states and territories.
Hopes the National Energy Guarantee would be signed off in its current form at a meeting of the nation's energy ministers in Melbourne were cast aside in favour of continued work by the Energy Security Board.
Ahead of Friday's talks, federal Energy Minister Josh Frydenberg recognised more work would be needed, given push back from some states on elements of the deal, including the 26 per cent emissions reduction target for electricity.
The biggest opposition to the current plan has come from Victoria, Queensland and the ACT, who all want a higher target for emissions reduction, reflecting the ease of reducing electricity emissions relative to agriculture, transport and industry.
The 26 per cent target is at the lower end of Australia's Paris Agreement commitments to reduce 2005 level emissions by 26-28 per cent by 2030.
If Australia is to have any hope of net zero emissions by 2050, it must have ambitious but achievable targets, Victorian minister Lily D'Ambrosio said.
"It is very important for us to know with any NEG that it has resilience and that it provides the opportunity for increased emissions reductions," she said, leaving the talks.
Queensland Energy Minister Anthony Lynham went into the meeting with four points his state won't compromise on, including its "rock solid" target for 50 per cent renewable energy by 2030, that downward price pressure continue, and the ability to scale up the emissions target.
"We've received reassurances today that those demands will be met so we're happy for detailed design to go through to August," he said.
ACT Greens leader and Climate Change Minister Shane Rattenbury came out of the talks feeling confident about the technical work being done by the Energy Security Board, but wants more answers on the Commonwealth's policy design.
Partners need to stay at the table to keep working toward a policy, he said.
But federally the Greens have taken a blunt position.
"The NEG is a dog. It locks in coal, locks out renewables and puts an impossible burden on agriculture and transport to cut their pollution," federal MP Adam Bandt said.
Federal Labor energy spokesman Mark Butler expressed a desire ahead of the meeting for further detailed work.
Labor has already committed to raising the emissions reduction target to 45 per cent if they're in government after the next election.
The new deadline for a decision is the next Energy Council meeting in August, allowing time for legislation to pass parliament by the end of this year ahead of the schedule 2019 start-date.
