Turnbull was forced to remove the emissions target from the proposed NEG following pressure from within his own party.
This move weakened Turnbull against the vocal right-wing of his party, notably former prime minister Tony Abbott, resulting in a leadership challenge.
Turnbull, leader of Australia since 2015 when he usurped Abbott in the role, stepped down after it was clear a majority in his party felt the need for change.
He has been replaced by Scott Morrison, a former ally of Turnbull but, according to reports, to the more conservative right-wing of the Liberal party.
Morrison famously brandished a lump of coal in the Australian parliament in 2017 before listing its benefits to the economy.
Turnbull said he would also step away from politics, indicating a by-election for his seat will be held shortly.
Turnbull's last days
Speaking on 20 August, before the government descended into chaos, Turnbull said the lack of a cross-party consensus in Australia’s House of Representatives meant dropping the emissions reduction target should allow the rest of the legislation, focused on reliability and pricing, to proceed.
"In politics you have to focus on what you can deliver, and that’s what we’ve done and will continue to do," Turnbull said.
"In a parliament where there is just a one-seat majority, the outstanding reservations of a number of our colleagues, combined with the absence of bipartisan support, mean that we won’t be in a position to take that legislation forward," he added.
The NEG was introduced just under a year ago in response to a series of blackouts in South Australia in 2016, caused by harsh weather conditions.
It consisted of two parts: a reliability guarantee that required utilities to ensure the correct level of dispatchable energy, and an emissions guarantee to contribute towards the country’s international commitments.
Turnbull said even without the emissions guarantee, Australia’s states can move forward on providing a reliable grid, ahead of winter weather next year.
"The NEG was primarily designed... to ensure that there was greater reliability or assured reliability in the energy market," Turnbull said.
"That’s the most pressing issue and... needs to be in place by July 2019. It’s not far away. Now, the absence of federal legislation on emissions intensity does not prevent the states from pressing on with the reliability guarantee," Turnbull told journalists.
Passing the baton
The NEG had come under fierce criticism from more conservative members of the Australian coalition government, notably from Turnbull’s party colleague and former prime minister Tony Abbott.
The original NEG policy had broad support from the clean-energy industry.
In early August, chief executive of the Clean Energy Council (CEC), Kane Thornton, said the policy had potential, but required a higher emissions target to be worthwhile.
Following Turnbull’s announcement, Kane tweeted: "Australia still needs a climate and energy policy that gives certainty for investors in new clean energy generation. Without it, investment stalls, power prices & emissions rise."