The Australian federal government on Wednesday released a new report showing carbon emissions in the nation are expected to increase sharply under current arrangements.

Despite a range of energy efficiency and renewable energy measures already in place, the Department of Climate Change projects a 24 percent increase in greenhouse gas emissions above 2000 levels by 2020.

This is even higher than predictions of a 21 percent increase made in the government's previous annual report for 2009.

According to Climate Change Minister Greg Combet, it demonstrates that reform is necessary, and the challenge Australia faced was to decouple pollution growth from economic growth.

"We need to get our pollution levels down and drive investment in clean energy," he told ABC Television on Wednesday.

"The only major reform that is going to get us on that path ... is the delivery of a carbon price."

Greens Senator Christine Milne said that the figures showed the government must abandon plans to expand coal mining and build new coal-fired generators.

She said a carbon price on its own will not turn the economy around, adding that the government needs to embrace renewable energy.

The report showed Australian remained on track to meet its Kyoto Protocol goal to curb carbon emissions, but strong international demand for the country's coal and gas would see a marked rise in emissions unless more action was taken.

Analysts and the government said that the longer it takes for a market price on carbon, the harder and costlier it will be to achieve the target.

The Labor government has earlier promised to introduce a carbon price during this term of parliament.