The report also warned the country will need to reduce emissions 40 per cent faster by the decade's end if it's to reach its net zero by 2050 target.

The Climate Change Authority's first annual climate change statement, released on Thursday, reveals a "big shift" in momentum is needed in order for the Albanese government to make good on its emissions reduction promise.

Climate Change Minister Chris Bowen told Parliament he was "pleased, but not satisfied" with the government's progress over its first six months, noting there was still "much more" to do.

But it needed to maintain a "two-fold" approach to lifting the country's renewable energy supply while shielding businesses from the pain of rising energy prices.

The authority's report advised the data showed the government's plan to achieve a 43 per cent reduction of emissions on 2005 levels by 2030 was falling short.

The current trajectory shows the country is on track to achieve just a 40 per cent reduction by the decade's end.

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With time running out, Australia will need to cut the same amount of emissions it has in last 18 years within an eight-year time span to 2030, it advised.

The decarbonisation rate would need to reach at least 17 million tonnes per year, or an increase of 40 per cent, to meet climate targets.

"The technologies for meeting the 2030 target exist, but the scale and speed of the task demand close attention is paid to barriers like supply chain disruption, labour skills shortages, and long lead times in planning and approval of major projects," the report said.

"For next year's annual progress report, the authority intends to establish and use leading indicators that show where the economy is heading, track the necessary transformations, and identify where action is needed to address insufficient progress."

Mr Bowen said the government still had a long way to go but some of its policies had already helped to inch closer to the 43 per cent target.

"We have done a lot in a short time. But there is so much more to do," Mr Bowen said.

"In this report to the House, I have emphasised the costs of climate change that we are already facing and that will get worse if we don't act.

"These are real and serious. It is too late to avoid the climate emergency. It is our job to act with urgency to avoid the worst of the emergency."

Mr Bowen said he would discuss a capacity investment mechanism with state and territory counterparts in coming weeks in a bid to reduce power prices.

He also used the speech to urge a greater take up from the business sector in meeting the challenge of emissions reduction.

Environmental groups welcomed the new data but added the government needed to take further steps to stop further fossil fuel projects from starting.

Australian Conservation Foundation chief executive Kelly O'Shanassy said ridding the flawed carbon offsets regime would put the country on a "credible path" to net zero by the mid-century.

"If we truly care about our region, Australia needs to rethink its commitment to digging up and exporting fossil fuels," Ms O'Shanassy said.

"There is absolutely no place for new or extended coal mines or gas projects in the third decade of the 21st century.

"While the October budget contained funding for renewable energy growth, it also provides billions of dollars in subsidies to the polluting fossil fuel industries. These should end."

Activist group Greenpeace similarly asked for "more radical and urgent action", including a halt to "climate-wrecking" fossil fuel projects.

The climate change statement comes a day after Mr Bowen introduced to parliament laws to reward industrial facilities that stay below their emissions baselines and give other facilities a new way of reducing net emissions.

The Safeguard Mechanism (Crediting) Amendment Bill 2022 will enable large industrial facilities to earn credits when they reduce their emissions below their baselines.

About 215 facilities that produce more than 100,000 tonnes of greenhouse gases a year are included in the safeguard mechanism and accounted for 28 per cent of Australia's total emissions in 2020/21.

- with AAP