Labor has committed to rewrite its national forest policy statement this term after an amendment was passed at the party's national conference in Brisbane.
The amendment was moved by Felicity Wade from the Labor Environment Action Network (LEAN) on Thursday.
She welcomed the commitment from the government to update the "totally inadequate" policy, which has been in place since 1992.
"(It is) a commitment that will properly assess the biodiversity values, the carbon values and how they can be monetised to create good jobs," Ms Wade said.
"It's high time for the revamp, and a proper, fair process is the way that Labor should attack these problems.
"We trust the minister will develop and deliver a robust and effective policy."
The government will look to expand Australia's plantation estate to meet both domestic and international demand for sustainably sourced wood products, and attempt to facilitate regional jobs in the process.
The management and restoration of native forests, rethinking carbon and biodiversity values and the need for their active and ongoing management will also be addressed under a revamped policy.
Knowledge from current timber workers and First Nations communities in restoring country are recognised as part of Labor's plans.
Opposition spokesman Jonno Duniam said Labor had taken a backwards step.
“There’s no question that LEAN’s involvement in updating the national forest policy statement will place significantly increased pressure on (Agriculture Minister) Murray Watt to end one of Australia’s, and the world’s, most sustainable industries,” Senator Duniam said.
Environment Minister Tanya Plibersek said a proposed nature repair market and further philanthropic and private-sector funding were essential to action on biodiversity issues.
"We're proposing a nature repair market to sit side-by-side with the carbon market," Ms Plibersek told a panel on the sidelines of the conference on Thursday.
She said it was important that any biodiversity benefits are measurable, trackable and traceable.
Australian National University environmental law and policy expert Andrew McIntosh said bad carbon-capturing projects had hindered any progression over the past decade.
"We need to make policy change, that is the Australian government needs to make policy change in order to support good projects," Professor McIntosh said.
He said extra subsidies and infrastructure should be part of the reforms.
