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Coal projects in the Galilee Basin and on the door step of the Great Barrier Reef could receive government financing under a $5 billion loan scheme in the federal budget.
But companies would have to demonstrate their projects would not be commercially viable without government funding to be eligible, the Abbott government has said.
Tuesday's budget included a new concessional loans scheme of up to $5 billion for infrastructure projects to encourage the private sector to invest in northern Australia.
Green groups immediately called upon the government to rule out any financing for a massive expansion of coal mines in the Galilee Basin in Queensland.
Environment groups have mounted a fierce campaign against projects from Indian companies Adani and GVK and Clive Palmer's Waratah Coal because of the likely increase in greenhouse gas emissions from the proposed mines and because coal from some of the projects will be shipped through the Great Barrier Reef.
The projects will also require the construction of a rail line connecting the mines in central Queensland to coal terminals at Abbot Point near the reef.
A spokeswoman for Treasurer Joe Hockey said companies building infrastructure in parts of Queensland, Western Australia and the Northern Territory would be able to apply for loans.
She said finance would go to projects that had an ability to generate a return but not at a level sufficient to be 100 per cent financed by the private sector.
"If the Galilee Basin coal projects would not be commercially viable without government assistance they may be eligible," she said.
"There are a number of examples of existing rail projects connecting large resource deposits to ports that are commercially viable."
The Treasurer's office said criteria for companies applying for loans was being developed.
The Greens will use question time on Thursday to pressure the government about the loan scheme.
"Big international banks have rejected these projects for a very good reason: they are economically unviable white elephants," Greens environment spokeswoman Larissa Waters said.
"Even if they limp along through the construction phase these projects won't turn a profit and therefore won't pay tax but they also won't provide sustainable, secure jobs.
Senator Waters said the government should be focusing investment towards renewable energy, which has been stalled as a result of the government's renewable energy target review.
Greenpeace said this week the government should block coal companies from the scheme.
Several international banks have ruled out giving finance to Galilee projects.
"At a time when 11 international banks have ruled out funding Galilee Basin coal projects, the Australian government must not prop up a dying industry that will harm the reef. Our money would be better used to help fund a transition to renewable energy," reef campaigner Shani Tager said.
Kelly O'Shanassy, chief executive of the Australian Conservation Foundation, said "we are very concerned this could become a dirty energy finance corporation" for coal projects that were struggling to find finance from the banking sector.
