New power stations built in Victoria will not be subject to carbon emissions limits after the State Government decided to scrap the restrictions.
The former Brumby Government legislated to allow a limit on carbon emissions produced by new power stations and the then Opposition said it would cap emissions at 0.8 tonnes per megawatt hour.
But the Government has scrapped the restriction after the Commonwealth decided not to go ahead with national standards.
The Energy Minister Michael O'Brien says the decision will reduce uncertainty for "stakeholders", including the controversial HRL plant planned for the Latrobe Valley.
Mark Wakeham of Environment Victoria says the Government has broken an election promise.
"They've torn up every one of their commitments on climate change," he said.
The Government has also abandoned its 20 per cent carbon emissions reduction target after a review found it would cost more than $2 billion.
Labor's spokeswoman Lily D'Ambrosio says it could pave the way for dirty new power stations in Victoria.
"The Baillieu Government must explain why they are doing this, why are they now saying that Victoria is open slather for new coal fired power stations no matter how dirty they might be," she said.