The Coalition's internal climate war risks damaging the economy after Europe declared it would reject a $15 billion trade deal with Australia unless the Morrison government keeps its pledge to cut pollution under the Paris accord.

Prime Minister Scott Morrison this week reset his government’s course on energy policy, declaring a focus on lowering electricity bills and increasing reliability, while relegating efforts to cut dangerous greenhouse gas emissions.

He has reaffirmed his government’s commitment to the Paris accord despite persistent calls by conservative Coalition MPs, led by Tony Abbott, to quit the agreement.

However there is deep uncertainty over how Australia will meet the Paris goal of reducing Australia’s carbon emissions by 26 per cent by 2030 given the government does not have a national strategy to meet the target.

The policy ructions did not go unnoticed at a meeting of the European Parliament's Committee on International Trade in Brussels, where the EU’s chief negotiator on the deal, Helena König, faced angry questions from the floor over Australia’s commitment to climate action.