A two-stage process might be used to get the national energy guarantee (NEG) happening.

Reports say the Commonwealth has come up with a plan in which ministers would sign off on NEG mechanisms, including the emissions reduction components, at an upcoming COAG meeting. This would be followed by a second conversation about Commonwealth legislation that puts the emissions reduction component of the scheme into action.

The states and territories essentially want the commonwealth legislation to reflect the details set out in earlier policy papers, not the watered-down version favoured by NEG skeptics in the federal party.

The Energy Security Board says states and territories can sign on to policy mechanisms without endorsing the federal government’s emissions reduction target, which many consider to be too low.

“Support by the energy council for the detailed design of the guarantee mechanism, as summarised in this paper, does not constitute approval, agreement or endorsement of the elements of the emissions reduction requirement that are the responsibility of the Australian government,” the ESB said in a recent paper.

It also pointed out that the final design of the NEG “does not limit the ability of states and territories to set and meet their own emissions reduction or renewable energy targets”.

It comes amid pressure in Victoria and Queensland from environmentalists, activists and the solar industry over the insufficiency of the emissions reduction target.

The first part of the new plan should be put to COAG energy ministers on August 10.