The Federal Cabinet has agreed to cut the renewable energy target to a figure that Labor is agreeable to and will today try to finalise a deal, the ABC understands.

The target is for 20 per cent of Australia's energy mix to come from renewable sources like wind and solar by 2020.

When it was set, the 20 per cent figure represented 41,000 gigawatt hours (GWh) of energy.

But energy demand has fallen since then and emissions intensive industries argue jobs are at risk if the 41,000 GWh figure is not cut.

The two major parties have been renegotiating the figure for several months.

Labor recently said it would back a cut to 33,000 GWh after previously arguing for significantly higher figures.

The Coalition has been holding out for a lower number but the ABC understands Cabinet last night gave the Industry and Environment Ministers approval to agree to Labor's figure.

"It does look that finally Tony Abbott has made some shift, after taking this industry right to the edge," Labor's Environment spokesman Mark Butler told ABC Radio National.

Mr Butler said settling on a final target is essential for industry.

"If there is a deal at 33,000 [GWh] that still would lead to an almost doubling of the existing wind power in Australia between now and 2020," he said.

"It would also mean that we were likely to be at a point of having almost 25 per cent of our electricity generated by renewable energy by 2020."

But Mr Butler said Labor would look to increase the target if elected.

"This is about getting the industry back on the rails so that we can then start a discussion about an ambitious future."