The Greens will support Labor’s key climate policy, the safeguard mechanism bill, through parliament after striking a deal on coal and gas projects.

“With our significant amendments, the Greens will be voting to pass the bill and will back the regulations, but the fight against all new coal and gas continues,” Greens leader Adam Bandt said on Monday.

The government is seeking to pass the mechanism through parliament this week so the reforms can be in place by July.

Labor needs the support of the Greens plus two crossbenchers to get the bill through the Senate against coalition opposition.

The Greens have been calling for the government to stop all new coal and gas projects in return for their support for the bill.

Under the deal there will be a ceiling on gross greenhouse gas emissions, which won’t be able to exceed current pollution levels of 140 million tonnes a year, and there will be a decreasing cap over time.

The bill will include a “pollution trigger” that will require the climate change minister to test a new or expanded project’s impact on the hard cap and net carbon budgets.

If the assessment finds that the project would contribute to exceeding the cap or budget, the minister must consult and recalibrate the rules or impose conditions on new entrants.

As well, all new gas fields for export will need to be carbon neutral from day one.

Prime Minister Anthony Albanese said the safeguard changes would allow for greater action on climate change, and for the country to become a “superpower” for renewable energy.

“We can’t afford to continue to engage in conflict in this place in order to try to get the perfect outcome,” he said in Canberra.

“We have a responsibility … to achieve real outcomes to protect our manufacturers, to grow our economy, while we’re dealing with emissions reduction.”

Mr Bandt said despite not gaining a total ban on new coal and gas projects, it would be more difficult for them to open in the future.

“Labor wants to keep opening new coal and gas mines. The Greens have stopped about half of them but Labor still wants to work on the rest,” he said in Canberra.

“Now there is going to be a fight for every new project the government wants to open … if any new coal or gas project opens from here on, it will be squarely on Labor’s shoulders.”

Climate Change Minister Chris Bowen said the mechanism would allow for emissions reduction targets to be met.

“We always wanted aggregate pollution to come down, that’s why we created the safeguard mechanism credits to incentivise that,” he said.

The safeguard mechanism was initiated by the Coalition government but is being overhauled by Labor. It will apply to the country’s 215 biggest emitters and force them to reduce their emissions by 4.9 per cent each year.

Companies that aren’t able to meet the targets would be able to purchase carbon credits.

The policy is considered essential to achieving the climate target of 43 per cent emission reduction by 2030 and net-zero by 2050.

Key crossbench senator David Pocock is also in talks with the government, voicing concerns about the overuse of carbon offsets under the plan.

– AAP