Energy and Emissions Reduction Minister Angus Taylor has denied the government's technology roadmap could involve an emissions trading scheme.
It comes as last month the government announced a new Emissions Reduction Fund method � "a voluntary scheme that aims to provide incentives for a range of organisations and individuals to adopt new practices and technologies to reduce their emissions".
Under the scheme � participants can purchase Australian carbon credit units (ACCUs) for emissions reductions.
One ACCU is earned for each tonne of carbon dioxide equivalent stored or avoided by a project � the credits can then be sold to generate income either to the government or an alternate market.
When asked if this scheme could evolve into some form of an emissions trading scheme, Mr Taylor denied that's how the system works.
"That is not how this is working," he told Sky News Australia.
"The traditional approach to a carbon tax or emissions trading scheme is to impose penalties � penalise the activities you don't like.
"This is a very different approach � this is an incentives-driven approach.
"Our approach is to incentivise."
