Opposition environment spokesman Mark Butler said it had become clear there was no prospect of an agreement.
"We've reached the very clear view that Tony Abbott is committed to making very deep cuts to the industry," he told ABC radio.
Labor was prepared to offer a "minimal compromise" of a target in the high 30,000s.
Mr Butler doesn't believe a target of 27,000 gigawatt hours is high enough to attract investment and sustain jobs in the sector.
He said Labor would re-enter negotiations if Mr Abbott signalled a "significant shift" in his thinking.
"This industry is incredibly important to Australia's future and it relies on a bipartisan position to attract investment," Mr Butler said.
The breakdown in talks means the government will have to negotiate with the Senate cross bench, including the Palmer United Party which has so far stood firm on no reduction to the RET.