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 The thermal power station in the NSW upper Hunter Valley, Australia. Source: skynews.

Energy Minister Angus Taylor says Australia has been able to "achieve its emissions reduction targets at $12 a tonne" as the government looks to expand its $2 billion Climate Solutions Fund.

The fund was expanded to finance emissions reduction across a range of high-carbon sectors, including manufacturing, transport and agriculture.

An extensive review found the $2 billion fund was not providing the best incentives for carbon abatement projects.

"Australia as a country has succeeded in these fantastic sectors like mining and agriculture because we've been prepared to deploy technologies that can help these industries prosper," Mr Taylor said.

"The focus historically has been very much on land use. What this report is proposing and what we're accepting is it needs to get beyond that and focus on industry."

The government accepted 21 out of 26 recommendations from the review, including enabling subsidies for carbon capture and storage.

"This is a great opportunity for us to really support those sectors coming out of COVID-19 - that have been strong sectors through COVID-19 - but we see enormous potential for them coming out," he said.