Environment groups say if owners of Australia’s dirtiest coal-fired power stations don’t accept payments to close down generation they shouldn’t receive any other carbon tax compensation.

Energy Minister Martin Ferguson will make an announcement about the so-called contract for closure negotiations in Melbourne on Wednesday morning.

The program seeks to support the closure of around 2000 megawatts of highly emissions-intensive generation capacity by 2020.

But a June 30 deadline for locking in a deal has already been and gone.

“At the moment it looks as though neither the federal government nor the coal generators are trying very hard to reach agreement,” Environment Victoria campaign director Mark Wakeham said in a statement.

He argues any decision to rule out contracts for closure for Hazelwood or Yallourn power stations would make achieving the 2000 MW commitment impossible because the other three power stations in the process only generate 600 MW combined.

“If these facilities now claim they have a profitable future and their asset values remain high then there is no public policy justification for the compensation payments that are coming at great cost to Australian taxpayers.”

Coal generators are expected to share some $5.5 billion in compensation over five years.