BCA chief executive Jennifer Westacott said business needed a clear signal of how emissions would be treated as part of the economy.
“The Business Council had been a very strong supporter of the clean energy target, as have other business organisations, as a way to send this signal,” Ms Westacott told ABC radio.
“If the government is not going to pursue Alan Finkel’s recommended clean energy target mechanism as a way of signalling emissions, then what is the alternative?
She acknowledged Energy Minister Josh Frydenberg’s observations that renewables had become cheaper “but that’s not the only story here.”
“We want to see a technology-neutral approach,” she said.