The federal opposition has taken the knife to funding to clean up coal, as climate change re-enters the election campaign.

Both major parties announced climate policies on Saturday. The Liberals focused on ending what it called the “free ride” for the coal industry, while Labor focussed on green farming.

The opposition said it would axe hundreds of millions of dollars of funding to clean up coal.

Labor had a $2 billion plan to shore up coal’s future by fostering Carbon Capture and Storage (CCS), a controversial technology which aims to capture and bury greenhouse pollution from power stations.

Labor has already cut the program’s funding by $150 million this campaign.

Opposition leader Tony Abbott has gone further, announcing he would cut almost $400 million from the scheme over the next four years.

He’s already said he’d scrap a $300 million CCS institute, taking total “clean coal” cuts to $700 million.

Opposition infrastructure spokesman Ian MacFarlane said the industry should pay a greater share – it has contributed, but governments have paid more.

“At the moment there is too much reliance, almost too much of a free ride, by the coal industry on the government,” Mr MacFarlane told reporters in Perth.

“The mining companies, the coal companies have to invest more of their own money in this technology.”

Mr MacFarlane said CCS “hasn’t advanced at the speed anyone expected … we have to look at other technologies”.

The opposition would redirect the CCS money to provide tax credits to investors in mineral exploration, and to invest in climate technologies that would bury emissions underground, in the soil and in algae.

Prime Minister Julia Gillard defended Labor’s investment in CCS.

“We’ve been very big investors too in Carbon Capture and Storage because it’s an important technology for the future, particularly a nation with as much coal as we have,” she told reporters in northern NSW.

Ralph Hillman from the Australian Coal Association told AAP he was “very disappointed” with the coalition’s “regrettable” cuts to CCS.

It was critical to Australia’s future to invest in the future of the coal industry, he said. A lack of government investment would only delay the arrival of CCS.

Mr Hillman denied the industry was getting a free ride, saying it was paying about one-third of the costs of developing CCS.

Australia is the world’s biggest coal exporter, and most of Australia’s electricity comes from coal.

Ms Gillard turned the climate focus to farmers as she donned boots for a trip to an agricultural research institute in northern NSW.

Labor wants to make it easier for farmers to earn money from green measures like planting trees, and environmentally-friendly management of cattle and wildfires.

Ms Gillard said the scheme could be worth $500 million to farmers over the next decade, and noted indigenous land managers could benefit.

“(It’s) good for our world, good for our atmosphere as we are reducing the amount of carbon,” she told reporters.

“Good for farmers as they get an income stream from a market-based mechanism where the money is coming from polluters, it is the polluters who pay.”

The scheme, to start in mid-2011, would tap into the international trade in carbon credits. Labor would set up the rules and laws required for farmers to participate.

Conservation groups tentatively welcomed the proposal, while the National Farmers Federation said Labor’s scheme would help but there were problems with the market.

The Liberals and the Greens said Labor was filling the gap from the Greenhouse Friendly scheme, which was axed several months ago.