Labor will scrap the Abbott government's central tool for cutting greenhouse gas emissions and focus on renewable energy if it wins power, Opposition Leader Bill Shorten is expected to say on Friday.

In an address at the University of NSW, Mr Shorten is expected to pledge to abolish the Emissions Reduction Fund, which uses public money to pay companies to reduce their pollution.

The fund spearheads the government's Direct Action plan, which replaced Labor's so-called "carbon tax".

Critics say the fund will not achieve the emissions cuts needed and taxpayers are subsidising polluters to carry out projects, such as improving energy efficiency, that they would have pursued in any case.