Emissions to the end of February had increased by an annual rate of 4.1 million tonnes compared with the end of June when the government scrapped the carbon price, the energy consultancy said, citing figures from the National Electricity Market.

The share of black and brown coal in the energy mix of the NEM – which serves about 80 per cent of the Australian market – edged higher to 74.9 per cent. That portion is up from 72.9 per cent in July and is closing in on the 75.1 per cent share held before the carbon tax began in mid-2012.

Gas ramped up as an energy source, reaching a record 13.3 per cent share at the end of 2014, as suppliers in Queensland prepared to start exporting. The share has now eased back to 13 per cent in February and is likely to make way for greater coal production – and higher emissions – in the months to come.

The share of hydro power and wind, at 7.2 per cent and 4.9 per cent in February respectively, was little changed from the previous month, said Hugh Saddler, principal consultant with Pitt & Sherry.

The rise in emissions from the power sector – accounting for about a third of Australia's total – comes even as electricity demand continues to wane as manufacturing shrivels and more homes and businesses take up solar power.

Pledges by the Abbott government to meet Australia's target of reducing 2000 level emissions 5 per cent by 2020 may also be harder to achieve after pollution from the transport sector started to rise again at the end of 2014.

"It may be no coincidence that mid-November was when retail petroleum prices started to decline steadily in response to the dramatic fall in global crude oil prices," the Cedex report noted.

RET cuts risks

Pitt & Sherry said the government's attempt to cut the Renewable Energy Target also threatens to trigger a rise in the carbon intensity of the power sector.

On the current goal of requiring 41 terawatt-hours of renewable-sourced electricity a year by 2020, the resulting reduction of emissions between 2014 and 2020 would total about 25 million tonnes assuming only black coal-fired power plants are displaced, the consultancy said.

"Without a doubt, [the RET] is the quickest and most certain way of making worthwhile reductions in emissions," Dr Saddler said.

Talks between the government and Labor to negotiate a reduction of the 41 tWh target have broken down again, Fairfax Media reported on Monday.

The government's alternative scheme to the carbon price to bring down emissions, the $2.55 billion Emissions Reduction Fund, will get its first trial next month with the inaugural  auction of pollution permits set for April 15-16.

Under the policy, known as Direct Action, the government will hold reverse auctions where it hopes to pay pollutants the least amount to secure emission reductions.

RepuTex, an energy analyst group, said in a report Tuesday that businesses are likely to baulk at competing to drive down the price paid per tonne.

Instead of paying $250 million for the 45 million Australian Carbon Credit Units on offer at the "least cost", the government's Clean Energy Regulator may end up having to cough up closer to $800 million, RepuTex estimates.