A government plan to overhaul environmental laws in three incremental stages has been shaken with a Labor-led committee pushing to hand wide-ranging powers to the environment minister from day one.

In a surprise move, the Senate committee, chaired by Labor, recommended the inclusion of amendments to the Environmental Protection Agency (EPA) bill that would enable the minister to "make, review and amend" environmental standards.

The recommendation comes a week after Prime Minister Anthony Albanese offered to water down the planned EPA bill, by largely limiting the body to an oversight role, in an effort to win Coalition support.

The government has also been negotiating with the crossbench in an effort to create national standards for protecting landscapes and approving new resources projects.

Proponents say the committee recommended changes would help speed-up roll-out of renewables investments at the heart of the net zero transition.

But Mr Albanese's gesture at bipartisan compromise was slammed by Greens senator Sarah Hanson-Young on Monday, who urged the government against doing a "dodgy deal" with the Coalition and work with the crossbench instead.

Environment Minister Tanya Plibersek in May moved to split creation of a federal EPA from a promised broader overhaul of environmental protection laws, as part of a three-stage legislative process.

The first stage, establishing a nature restoration process, was passed early this year, with the EPA currently before parliament. Stage three, which has no clear timeline, would involve a detailed revamp of environmental laws, including the crucial new standards.

Labor senator Karen Grogan, who chaired the committee, said the environmental standards "are a critical pillar of the Nature Positive reforms and through the inquiry I came to the view that they could be developed while the third phase progresses".

"That would mean the package would be enforcement, compliance, data and standards.

"Essentially, [it's] a significant step towards better environmental protection, and clearer more transparent system for business and the environment."

It is understood the minister's position on the bill, and on leaving the standards for the third stage, is unchanged.

Ben Wickham, managing director of clean energy company ACCIONA Energia, backed giving Ms Plibersek standards-setting powers from day one to boost public confidence in the energy transition and hold projects accountable.

"We see standards as part of enabling the industry's social license and the public's trust that projects are not having a disproportionate level of impact on the environment," Mr Wickham said.

Clean Energy Investor Group interim CEO Marilyne Crestias said opaque and inconsistent national environmental laws are creating risks for clean energy investments.

"National standards are desperately needed. Renewables investors need clear rules and faster assessment processes. Standards can deliver these outcomes," she said.

"We need urgent reforms to support the clean energy rollout. We can't afford to wait.

"There is support from clean energy investors for immediately progressing national environmental standards.

"We urge the parliament to take the opportunity to deliver tangible improvements for business and the environment by legislating the ability to create national standards as part of the Nature Positive reforms before the parliament."

Labor's internal environmental wing, LEAN, told the Senate inquiry that introducing a legislated power to create standards within stage two could "deliver immediate change in the outcomes for both business and the environment".

"By putting national environmental standards in place now and by identifying unacceptable impacts now, these are some safeguards that can go in now and start protecting nature so that the EPA is set up for success from day one, so we are not delaying the really important elements until stage three," said the Environmental Defenders Office.

If passed, the Grogan amendment would enable the environment minister to set national standards by a "disallowable legislative instrument" , which can be overturned by a Senate majority.