Cabinet is expected on Monday to confirm a bill to amend the Emissions Trading Scheme.
It will be introduced to the House later this week.
Energy intensive industries at risk from the scheme will be allocated carbon credits and won't have to pay for increased emissions if their productivity also rises.
However, an opposition party says the cost to taxpayers will be huge.
The Greens say a recent announcement by Methanex means its allocation value could rise from $12.7 million to $87 million per year.
Methanex turns methane into natural gas. The company is to re-commission two plants.
But Climate Change Minister Nick Smith says the Government has 61 million units under Kyoto - enough to allocate.
He says the Government could have sold the credits for cash, but made an election promise it would not do so.
Dr Smith says almost all of the $400 million cost of the revised scheme is to help reduce its impact on the price of petrol and electricity.
But he says he can't guarantee there will be no costs to taxpayers after 2013 when a new protocol should be in place. Dr Smith says the ETS will be reviewed in 2011.
Victoria University view
Victoria Unversity says Dr Smith is missing the point about emissions trading.
Environmental studies director Ralph Chapman says giving trade exposed industries free allocations essentially tells them they can increase their emissions without paying the cost.
He says that's a very weak incentive to cut emissions.
