The package of nine bills was put to a vote in the upper house this morning and was defeated 33 votes to 29.
"The Senate has rejected Tony Abbott's do-nothing approach on global warming and voted to maintain the price on pollution," Greens Leader Christine Milne said in a statement.
"Direct Action will be more expensive than the current market based mechanism and ineffective at reducing carbon pollution."
The government has been trying to pass the carbon tax repeal bills as a matter of priority since December but has faced an impasse in the Senate.
It will only be able to bring the legislation before parliament again in three months and if the legislation fails to pass once more, it would provide a trigger for a double dissolution election.
Earlier, the federal government had moved to reintroduce a bill to axe the Clean Energy Finance Corporation, which the Senate rejected last December (see Related Stories).
If the bill is voted down again, it would give the government a trigger to call an election of both houses of Parliament.
According to ABC news, Environment Minister Greg Hunt has said that he will "push ahead with a vote soon, including on the future of the CEFC".