But Prime Minister Scott Morrison has rebuffed international criticism and maintains coal has a future while announcing funding for a "clean hydrogen" hub at Newcastle.
The federal government is paying for half of a $3 million feasibility study for the project backed by the Port of Newcastle and Macquarie Green Investment Group.
"We're committed to developing a world-leading hydrogen industry while providing investment and growth opportunities for our communities like Newcastle and the Hunter," Mr Morrison said on Monday.
It followed Australia's refusal at the COP26 Glasgow summit to sign up to a commitment to cut methane emissions 30 per cent this decade or a separate pledge to phase out coal-fired power.
The chair of the UK Committee on Climate Change, Lord Deben, warned Australia's laggard pace on the issue put its trading partnerships at risk.
"(It is) a great disappointment to the rest of the world that so good a country with so much history should have been so much behind on these issues," he told ABC radio.
"Already, the British-Australian trade deal is under huge pressure in this country because we don't see why we should import things from Australia unless Australia meets the same standards.
"What was so disappointing for us was the way it appeared that your prime minister really doesn't understand the urgency of what we have to do."
Mr Morrison stood by Australia's 2030 emissions reduction target of 26 to 28 per cent below 2005 levels at Glasgow, arguing it was an election promise.
But the government has updated its projections saying Australia's on track for a 30 to 35 per cent cut this decade.
Lord Deben thought Australia's mid-century target for net zero emissions lacked substance.
"When Scott Morrison tried to explain what he was going to do between now and 2030, it was just a whole series of words," he said.
"You cannot go forward without signing up to eliminating coal."
Junior coalition partner, the Nationals, extracted a series of concessions in exchange for its support for a net zero by 2050 target, including returning the resources minister to cabinet.
Other aspects of the Nationals' agreement for net zero, including a future fund for regional and rural Australia, are yet to be publicly revealed.
"Patience is a virtue," Resources Minister and Natoinals MP Keith Pitt told ABC radio when pressed for detail about the funding.
"These are agreements between the two leaders - they'll work their way through the normal processes."
Meanwhile, NSW, South Australia and the ACT launched a net zero emissions policy forum to tackle climate hurdles with comparative governments around the world.
"Greenhouse gas emissions do not recognise borders, and to tackle climate change we need a globally collaborative approach and that is what this forum is about," NSW Treasurer Matt Kean said.