A controversial plan to allow big industry to use a new koala national park in New South Wales to offset its climate pollution is expected to go ahead after the Greens reached a deal with Labor, and decided not to vote with the Coalition to block it.But three Greens – Tasmanians Nick McKim and Vanessa Bleyer, and Western Australia’s Jordon Steele-John – declared they would cross the floor to oppose the deal on Thursday afternoon.The minor party and environment advocates have been divided over whether to support a regulation proposed by the NSW government, and introduced by the Albanese government, that lets states earn carbon credits for protecting native forests that had been earmarked for logging.The Nationals want to kill the regulation, known as a carbon credit method, on the grounds it would hurt the forestry industry. They have introduced a disallowance motion in the Senate.Sign up for the Breaking News Australia emailThe Greens have the casting votes. For weeks, they have been split over which way to go. They want the park – a promised 476,000 hectare reserve, including 176,000 ha of newly protected areas – but have been divided over whether it should be allowed to happen this way.The Greens leader, Larissa Waters, said her party had improved the method, but would oppose other upcoming carbon credit legislation that would produce a larger number of credits.“The fight against Labor’s carbon credit greenwashing starts with the Greens opposing 40% of the offsets used by these big polluters to hide their emissions,” she said in a statement.“For years, Labor has created a system that allows big polluters to buy get-out-of-jail-free cards instead of cutting their emissions, and the consequences of this broken system are being felt around the country by communities living with the floods, fires and heatwaves. That ends now.”Waters did not directly address in her statement that three senators would cross the floor.In a separate statement, McKim, Bleyer and Steele-John said “people of good heart and clear mind can, and have, come to a different position on this issue” and they would vote “according to our consciences”.“We want Greens members and supporters to know that we do not support the relentless commodification of nature, and will not be part of making it easier and cheaper for big carbon polluters to keep emitting as [this method] does,” they said.The two Tasmanian senators said the issue was a “crossroads moment for the Greens” and accused Labor of “holding koalas hostage and threatening to drive them towards extinction unless they can profit from their habitat”. “We simply don’t accept that forests need to be monetised in order to save them,” they said.Each Australian carbon credit is said to represent one tonne of greenhouse gas emissions that has been prevented from being released or drawn down from the atmosphere. Their use is contentious, partly because polluting companies can buy an unlimited number of credits – also known as offsets – to count as their own cuts while continuing to pollute.skip past newsletter promotionafter newsletter promotionPeer-reviewed studies have found some existing carbon credit methods have not effectively reduced emissions and scientists say limiting the climate crisis requires rapid direct emissions cuts and offsets should be used sparingly.The Greens said the deal with Labor would ensure credits from protecting public forests could not be sold to coal and gas companies if that was the intention of the state government. The NSW premier, Chris Minns, has promised this for the koala park.They said the deal would force state governments to make a bigger total reduction in logging if they wanted to earn any carbon credits for protecting forests – by 2030, the total cut in logging will need to be 30%. It also closed a loophole so native forests that were regrowing could not be re-classified as a plantation.Those who wanted the regulation killed included Tasmanian and Western Australian state Greens MPs, the Bob Brown Foundation, the Wilderness Society and the Australia Institute. They say the method fails a basic test. NSW Labor proposed a koala park near Coffs Harbour a decade before announcing it was dependent on carbon credit revenue, and the offsets created would therefore not represent real additional emissions reductions.They argue forests should be protected for their intrinsic values, and backing the plan would put capitalism before the environment and set a dangerous precedent for other state governments to not protect the environment unless they received carbon credits.On the other side are most NSW Greens’ state MPs, a list of NSW and larger conservation groups including WWF, Greenpeace and the Australian Climate and Biodiversity Foundation, some Indigenous organisations and several senior ecologists.They argue there is no guarantee the park would go ahead as promised if the method was disallowed, and that the benefits of protecting 176,000 hectares of additional forests that are home to more than 100 threatened species and that have been devastated by decades of logging is the most important consideration.A Greens insider involved in the internal debate about what is called the “improved native forestry management” carbon credits method said it had been “hard and emotionally draining for everyone” and that Waters “took personal risks and showed real leadership to chart a way through this”.Labor said the agreement with the Greens confirmed that a majority of the Senate would oppose the Coalition’s disallowance motion and the regulation would survive.