The government has quietly told officials to look into new climate policies to help with a future shortfall in the country's carbon budgets.
The directive is included in a tranche of documents about settings for the emissions trading scheme, which the government proactively released on Thursday.
The documents also confirm that transport, industry and other sectors will have to pick up the slack from removing agriculture from the emissions trading scheme (ETS) for good.
If the government did not come up with new ways to save emissions within the next year or two, the country would not be able to meet some of its targets at all, the commission warned.
"The time available to correct course is now short," it said.
Prior to the commission's warning, though, ministers had already given approval to officials to start working on new policies.
The decision was prompted by earlier warnings from the commission in 2025 that the country was off-track to meet its 2031-2035 emissions budget - the maximum amount of emissions the country can produce over that period and still stay on track for its 2050 climate targets.
Officials said the gap had grown further, after the government weakened policies targeting agricultural emissions, including cancelling a planned methane tax.
"Recent government decisions on the 2050 methane target and the removal of agricultural pricing have increased reliance on [other] sectors to meet [the emissions budget] and increased the size of the gap."
In addition, officials wrote, higher-than-expected agricultural emissions meant the current emissions budget for 2026 to 2030 was also at risk, unless other sectors reduced their emissions even further.
"Additional options to support and encourage emissions reduction and removals across major emitting sectors will be needed."
The government has repeatedly said the ETS - which puts a price on carbon - is the country's main tool for driving down emissions.
However, without agriculture, it only covers about 40 percent of total greenhouse gases.
"The ETS remains a major tool for meeting emissions budgets, but it is not expected to meet [them] on its own," officials wrote.
They recommended that Climate Change Minister Simon Watts get his colleagues to agree to "proactive development" of new policies to bring emissions down.
"This would also start to address the Commission's advice that government needs to act ahead of [the 2031-35 emissions budget]."
In response, a Cabinet committee directed officials "to identify and develop strategic options across major emitting sectors to support meeting the third emissions budget and to report back to the minister after the 2026 general election".
In a committee paper, Watts told his colleagues that doing so could also help the government's "public climate change narrative" and speed up its renewable energy plans.
It would also mean ministers in the next government would have "detailed, realistic and implementable options" when they started work on the country's next emissions reduction plan, due in 2029.
The government has until October to respond to the Climate Change Commission's July advice.