The Morrison government wants Australia’s green bank to invest in the controversial technology, with $500 million to help fund small start-ups considered too risky for private finance.

The other half of the money for the $1 billion Low Emissions Commercialisation Fund is expected to come from the private sector.

Taylor said he wanted to see the technology fund set up as soon as possible, to invest in a diverse range of emission reduction methods.

“We don’t want to pick and choose a technology on some kind of ideological basis, anything that can work is our focus here,” he told ABC radio on Wednesday.

“We need every horse in the race. (Emissions reduction) is a difficult goal for the world, it’s a difficult goal for Australia, you can’t rule things out.”

The coalition plans to introduce legislation to parliament before the next election due by May 2022.

The government lists examples including for investment of renewable-powered carbon capture and storage, lower emissions steel and aluminium as well as advancements in battery storage, soil carbon and solar panels.

“Australia can become a world leader in creating low emissions technology that is both affordable and scalable, helping get emissions down while creating jobs,” Prime Minister Scott Morrison said.

While Taylor described the proposal as “sensible”, the legislation would need the support of crossbench senators in order to pass.

The fund would allow for more start-ups to invest in emissions reduction means.

“There’s a gap in the market, it’s difficult for (start-ups) to get funding, and there’s a role for government to play alongside the private sector,” he said.

Opposition climate spokesman Chris Bowen said Labor would closely examine the new policy.

“We have opposed a diversion of renewable energy funding to carbon capture and storage,” Bowen told ABC television.

“As I said at the very beginning we’ll look at the details, all I have seen is spin.”

Bowen said the legislation would be a test for the Nationals to support the measures, after the junior coalition partner previously attempted to seek changes to the government fund to allow investment in nuclear energy and carbon capture.

Queensland Nationals senator Matt Canavan criticised the plan as “a billion dollars for a bunch of rent-seekers who are talking about fake jobs”.

“It seems like a big waste of money to me,” Senator Canavan, who’s a constant critic of green initiatives, told Nine Network on Wednesday.

“We need to look at real jobs, not just green jobs.”

Carbon capture and storage has been criticised by the likes of mining magnate Andrew “Twiggy” Forrest as an unproven failure.