Prime Minister Tony Abbott has long favoured the abolition of carbon tax.

Reuters/Sydney

The effort to repeal Australia's controversial carbon tax, which has drawn former US Vice President Al Gore into its increasingly odd orbit, moved one step closer to success on Thursday as the lower house of parliament voted to scrap it.

The late-night vote on the last day before lawmakers head out on holiday was the latest hurdle for the legislation to clear as it heads towards full repeal when the new senate is sworn in next week.

Conservative Prime Minister Tony Abbott, once a climate-change sceptic, made the abolition of the carbon tax a centrepiece of his election campaign last year, but lacks the votes in the upper house of the current parliament to have it repealed.

Australian lawmaker Clive Palmer, whose Palmer United Party (PUP) will hold the balance of power when the new senate is sworn in on July 1, has thrown his support behind the repeal, all but ensuring it will pass within weeks.

Earlier this week, Gore stood beside Palmer, a mining magnate with a long history of shocking behaviour, as he said he would support the repeal but only with conditions that have thrown the future of the country's environmental policy into chaos.

Chief among his conditions was that Australia create a new emissions trading scheme in place of the one about to be repealed, which would have a zero price on carbon until Australia's main trading partners adopted similar legislation.

But Palmer has since made statements suggesting that the prospective international trading scheme may have arrived stillborn, raising questions about why he received support from Gore, a staunch environmentalist.

Palmer is known for his bizarre behaviour, including accusing news magnate Rupert Murdoch's wife of being a Chinese spy and claiming that the CIA had plotted for decades to bring down the Australian economy.

The opposition Labor Party, which enacted the taxes with the help of the Greens Party at the height of Australia's mining boom, has said it expects the taxes will be repealed.

Opponents of the carbon tax say it has swelled costs facing industry and the public and done little to cut emissions, a position disputed by its supporters, but long backed by Palmer.

The new bill will remove the obligation on 348 of Australia's biggest companies to pay A$24.15 for each tonne of CO2 they emit and repeal legislation that would have launched an Emissions Trading Scheme in 2015.

Australia has among the world's highest carbon emissions per capita due mainly to its reliance on coal-fired power stations.

The government plans to replace the carbon tax with a A$2.55bn ($2.40bn) Emissions Reduction Fund that will pay big emitters to cut carbon levels, but Palmer has dismissed that plan as "hopeless", casting more doubt on the path forward.