Almost half the money the Turnbull government has set aside to pay for emissions cuts has now been committed, after a further $557 million was spent under the second auction of its emissions reduction fund.

But the auction results that were released on Thursday have again sparked criticism from policy observers, who said they showed the fund would achieve only a small proportion of the emissions cuts needed to meet Australia's international climate targets.

Projects that won contracts under the latest auction were again dominated by schemes to protect and restore native vegetation and curb emissions from landfills, echoing the results of the fund's first auction in April.

The emissions reduction fund is one of the central pillars of the government direct action climate policy. The fund has $2.55 billion immediately committed to it, with Environment Minister Greg Hunt having previously said $200 million a year would be spent up to 2030 after that.

In a significant hitout for the Coalition's climate plans ahead of the Paris climate summit later this month, the second auction saw another 129 contracts signed for projects to reduce greenhouse gases.

If delivered, those projects would see 45 million tonnes of emissions cuts at an average price of $12.25 a tonne, lower than the $13.95 a tonne paid under the first auction.

The contracts signed stretch in length from one to 10 years - meaning not all the carbon abatement purchased will count towards Australia's immediate 2020 emissions reduction goal of a 5 per cent cut from 2000 levels.

It brings the total spend from the emissions reduction fund's two auctions to about $1.2 billion, and the total emissions cuts bought to just short of 93 million tonnes.

Climate Institute chief executive John Connor said at this rate the scheme would deliver just 15 per cent of the emissions cuts needed to meet Australia's longer-term climate target for 2030.

By then the country has pledged to cut emissions by 26 to 28 per cent from 2005 levels (or 19 per cent from 2000 levels).

"The government has run another professional auction process, but now we need to get down to the policies that matter. We need to tackle the biggest polluting sector of the economy – the electricity sector," Mr Connor said.

"This starts with a closure plan for our old and inefficient coal-fired power plants so they can be replaced with clean energy alternatives."

Executive director of carbon market analysts RepuTex, Hugh Grossman, said while the auction result was strong in isolation, the emissions reduction fund was not curbing Australia's emissions growth.

"Accounting for the [fund], we continue to forecast a 15 per cent increase in national emissions through to 2030," he said.

"This indicates that the rate of Australian emissions growth is significantly outpacing abatement contracted by the [fund]."

Mr Hunt - who is returning from Paris from warm-up climate negotiations ahead of the full summit starting later this month - said the auction results demonstrated Australia had one of the most effective carbon-cutting systems in the world.

"I look forward to highlighting the success of the fund when I return to the Paris climate change talks later this month and outline Australia's strong suite of policies to reduce emissions," Mr Hunt said in a statement.

The second auction was carried out last week by the Clean Energy Regulator, an independent government agency.

The regulator chair, Chloe Munro, said she was pleased with the high level of participation and bidding that occurred in the auction, "which has allowed us to source significant abatement at a lower average price than the first auction".

"We are keen for participants that missed out to be able to bid again soon. Based on the number of projects yet to come forward to an auction we know there is already strong interest in the market," Mr Munro said.

While the land and waste sectors make up the vast bulk of the projects being paid under the scheme, for the first time projects dealing with industrial fugitive emissions and energy saving programs were also contracted under the most recent auction.

Amid the winning companies was the ASX 100-listed Wesfarmers, which owns Coles, Kmart, Bunnings and Officeworks among other brands, which won a contract to upgrade lighting.

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