After months of consultation and negotiations, the Greens and Labor reached a deal on Monday over the signature bill designed to give big polluters, such as Woodside and Qantas, an incentive to cut or pay offset to reduce emissions by 4.9 per cent each year by 2030.

It is central to the government's 2030 net zero pledge: A reduction of greenhouse gas emissions by 43 per cent below 2005 levels by 2030. The government wanted the Parliament to pass the bill this week to help meet the target.

In getting the Greens support - and with the Coalition saying the scheme is a "carbon tax" and "completely changed" from what Tony Abbott introduced in 2016 - the focus had shifted to the more progressive side of the Senate crossbench.

After overnight talks, and with remaining reservation about the way carbon offsets are used, Senator Pocock is on board.

"As a result of the amendments we've seen, announced [Monday] by Minister Bowen and Adam Bandt and then in subsequent conversations and and some further commitments from the government, I'll be supporting the safeguard mechanism," he said.

While he would prefer more ambitious climate policy, economy-wide carbon pricing, he accepts the safeguard mechanism reforms will tighten up the scheme.

"I've still got reservations about the way that offsets are using the mechanism and have been pushing the government for other commitments to ensure that we are addressing some of those concerns," he said.

It comes as the government seeks to pass significant legislation in the last week of the sitting fortnight, including the $10 billion Housing Australia Future Fund bill and the bill to set up the $15 billion National Reconstruction Fund.

The Greens compromised on its key demand of no new coal and gas projects to come to the deal covering 215 of Australia's biggest polluters. But Greens leader Adam Bandt claims the deal is a "big hit on coal and gas that has been delivered by the Greens".

He also whacked the government over its climate credentials.

"Negotiating with Labor is like negotiating with the political wing of the coal and gas corporations," he said. "Labor seems more afraid of the coal and gas corporations than the climate collapse."

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While Climate Change Minister Chris Bowen indicated not too much was given away. He said the deal meant Labor was keeping with its election mandate and policy agenda. "We always wanted aggregate pollution, absolute pollution, to come down."

The deal includes a hard, legislated yearly cap of 140 megatonnes of pollution. The "absolute" cap is designed to drop year to year with net total emissions under the plan expected to be below 100 megatonnes in 2030.

So no absolute ban, but Mr Bandt is seeing the deal as a coal and gas project killer with greater transparency, "pollution tests" for new or expanded projects and a "safeguard trigger" for ministerial intervention.

"This means a huge number of those 116 coal and gas projects in the pipeline will not be able to go ahead," he told reporters on Monday, before clarifying that he meant half of the 116.

The Climate Council's Jennifer Rayner has told The Canberra Times the deal means that Australia's "era of climate gridlock is over".

"There's a lot more work to do today. But the fact that the Parliament has been able to come together to make a really strong climate policy, as a great start, shows that every business now needs to get its skates on," she said.

"That hard cap is something the Climate Council advocated for very strongly, because we do know that that's essential to drive genuine emissions reduction and to make life much harder for new coal and gas."

Under the deal, the government will offer extra money, "focused on decarbonisation" to support "Australia's sovereign capability" in the manufacturing sector and trade-exposed industries, particularly in the steel, aluminium and cement industries.

The government will also commission a review to examine the feasibility of an Australian carbon border adjustment mechanism, with particular consideration for the steel and cement sectors.

The Greens are expecting former member Lidia Thorpe to stick to her deal when she left the party that she would continue to vote with the Greens on climate. She has not stated her position on the safeguard bill.

The Coalition, which brought in the scheme in the first place, opposed the revamp and did not negotiate with the government over possible amendments.

"This is the most punitive carbon tax in the world bar none," the opposition's climate change spokesman Ted O'Brien told reporters.

The level of the cap "puts us at a real disadvantage", he said. "We're going to see, ultimately, businesses close. This caps Australian industry. It caps growth."

The Business Council of Australia has long supported the safeguard mechanism as a pathway to reducing emissions and has welcomed the bill's progress.

"Additional support for trade exposed businesses and workers as well as critical sovereign capabilities is a crucial step that will help save jobs and ensure Australian businesses are competing on the global stage," BCA chief executive Jennifer Westacott said in a statement.

"As designed, the safeguard mechanism and its baseline targets are tough but achievable, so we'll be working with members to assess the full impact of proposed changes."

Meantime, the fate of the Albanese government's signature housing bill, the Housing Australia Future Fund Bill, remains uncertain with Labor yet to secure Senator Pocock's support.

The key crossbencher wants to see more ambition to address Australia's housing crisis, particularly for the ACT which is facing a 3100 shortfall for new social and affordable homes but is on track to get 500 under the proposed fund.