Wong said the figures were good for Australia, and showed a cut in expected emissions, although emissions would continue to grow to 120 percent of 1990 levels by the year 2020.

"We should not be celebrating an increase in Australian greenhouse pollution," said climate lobbyist John Connor, from the Australian Climate Institute.

The driest inhabited continent is also the world's largest coal exporter with an economy reliant on fossil fuel for transport and energy, with about 80 percent of electricity coming from coal-fired power stations.

Australia is responsible for about 1.2 percent of global emissions, but remains one of the highest polluters per capita.

The former conservative government negotiated a generous deal under the Kyoto Protocol, allowing for a 108 percent increase in emissions by 2012, but then refused to ratify the pact, saying the targets would unfairly hurt the economy.

But Prime Minister Kevin Rudd ratified the Kyoto Protocol on climate change last December in his first act after being sworn in to power, leaving the United States isolated as the only developed nation not to sign up to the pact.

The emissions report on Monday found government decisions to stop landclearing and deforestation were the main reasons Australia would reach its Kyoto targets, with most other sectors set to record large increases in carbon pollution.

Emissions from stationary energy, including electricity generation, would increase by 56 percent on the 1990 levels by 2012, and would be 64 percent higher by 2020.

Emissions from transport were projected to increase 42 percent on 1990 levels by 2012, and be 67 percent higher by 2020, while industrial process emissions would rise 49 percent by 2012 and 95 percent by 2020.

Greenhouse emissions from land use and forestry would fall 68 percent from 1990 levels by 2012 and remain stable from 2010 to 2020, the report predicted.

But while emissions per capita would fall 13 percent from 1990 levels, from 33 tonnes to 28 tonnes, by 2012, they would climb back to 29 tonnes per person by 2020, it said.

"We recognise that much more needs to be done," Wong said, adding Australia planned to introduce a system of carbon trading by 2010 to give business a financial incentive to cut emissions.