SIGN UP for our newsletter ✉️ :

Get the latest stories delivered straight to you

We're not banning coal and gas: industry minister

Coal, gas, and logging will not be banned under Labor's $15 billion National Reconstruction Fund, Industry Minister Ed Husic says.

The government's election pledge passed the lower house on Thursday after a deal was struck with the Greens, amending the legislation to prevent the fund being used to invest in coal and gas projects, or log native forests.

The manufacturing fund will provide finance for projects in key areas such as technology, transport and renewables to boost manufacturing in Australia.

But the decision to exclude logging from any funding has angered Tasmanian senator Tammy Tyrrell who accused the government of breaking their promise to support her state's industry.

Mr Husic said logging would continue to take place where states and territories allowed it.

"The whole notion that this will stop logging, it won't, it will continue," he told ABC Radio on Friday.

"We're not banning coal and gas in the NRF (reconstruction fund).

"We are saying that the NRF is about a specific activity where there's a value-add component."

However, he said the government recognised coal and gas energy generation was important for industry.

While a parliamentary committee on Friday recommended the legislation be passed without further amendments, coalition senators on the committee raised a number of concerns.

The opposition senators said the legislation needed to ensure greater transparency and accountability, raising concerns a $15 billion fund could have "so few checks and balances".

The legislation's intent to avoid grants as a form of funding to the manufacturing industry was also opposed.

Coalition senators also claim by shifting "national priorities" the fund could lead to investment uncertainty, which could result in companies relocating and the loss of Australian jobs.

Mr Husic reiterated the manufacturing fund was never designed for coal and gas projects, but Labor was happy to provide the Greens with reassurance.

"We have expressed, emphasised, said a number of times this fund is about manufacturing," he said.

"It's not about extraction, it's not about logging either."

The government still needs the support of at least two crossbench senators in addition to the Greens for the bill to pass.

The coalition has promised to scrap the fund in government.