The Government's re-jigged emissions trading system -- for which it expects Maori Party support in Parliament -- will kneecap the nation's clean and green reputation overseas, a big environmental lobby says.

The revised ETS is "a very, very slow start to any meaningful obligations that will do irreparable harm to New Zealand's international reputation," said the Environmental Defence Society chairman Gary Taylor.

"This decision is a major disappointment and will do significant harm to New Zealand's international reputation."

Industries would have been liable under existing law for the equivalent of 10 percent of their 2005 emissions from next January, phasing in the full cost of their pollution by 2030.

But now major polluters such as Fonterra or electricity retailers such as Contact Energy and transport companies will need only one emissions credit for every two tonnes of carbon dioxide released above their allocation until the end of the first Kyoto commitment period, to December 2012.

Government supports will then be phased out, at a rate of 1.3 percent a year, with taxpayers still providing support in 2050, based on energy intensity and average industry emission levels.

Companies will also have the option of meeting obligations by paying fees capped at $25/tonne of emissions.

The ETS changes have postponed when farmers take on their obligations, with agriculture being brought in from January 2015, instead of January 2013.

It also brought forward the obligations of electricity generators and industrial manufacturers from July to January 2010, and transport fuels from January 2011, to July 2010.

It also extended the period of taxpayer support for industry all the way through to 2050, with transitional support for the fishing industry boosted from 50 percent to 90 percent.

"This makes business into welfare dependants, with taxpayers paying the bill for the first half of this century," Mr Taylor said.

It moved towards an intensity basis for agriculture liabilities, which will mean any allocation of support will vary relative to production, rather than just being benchmarked to 2005 levels.

"This will enable agricultural emissions to keep rising," Mr Taylor said.

Offering an option for companies to pay a fixed price of $25/tonne of carbon dioxide equivalent diluted the effectiveness of the ETS by putting a cap on the carbon price, and the signals were weakened by reducing industry obligations to just 50 percent of actual emissions until the end of 2012.

But the Greenhouse Policy Coalition -- which lobbies on behalf of companies that use a lot of energy -- said the re-jigged scheme was a "welcome move in the right direction". "We welcome the effort being made to keep New Zealand employers competitive," the coalition's executive director, Catherine Beard.

Making the scheme more affordable for households and industry was sensible, and halving the initial obligations and taking longer the phase-out support was more in line with other ETS systems. Ms Beard said aim of the policy should be to keep efficient industry and jobs in New Zealand.

Wellington Regional Chamber of Commerce chief executive Charles Finny, said that despite the Government's improvements the ETS remained complicated.

"There are a number of issues which will need to be dealt with," said Mr Finny, who has repeatedly called for a carbon tax instead of an ETS. The scheme would only be effective if it was aligned to what key trading partners were doing, because otherwise polluting industries would simply move offshore. Business NZ chief executive Phil O'Reilly said no scheme was be likely to get universal support, but the revised scheme met the needs of most sectors.

Aligning the scheme with Australia's scheme would also help prevent the loss of industry across the Tasman.