Australia's greenhouse gas emissions increased for the third consecutive year in 2016-17, but the Federal Government insists it can still meet its climate change goals.

Key points: Greenhouse gas emissions increase for third consecutive year

Greenhouse gas emissions increase for third consecutive year Energy Minister Josh Frydenberg says Government on track to meet 2020 target

Energy Minister Josh Frydenberg says Government on track to meet 2020 target Federal Government gives "in-principle" support to international carbon trading

New Environment Department figures shows gas emissions grew by 0.7 per cent last financial year, which has been blamed on an increase in gas production and exports.

That comes after a 0.8 per cent increase during the 2015/16 financial year, which was accompanied with a warning Australia was not on track to meet its 2030 emissions reduction target.

But Energy Minister Josh Frydenberg said the latest data showed the Federal Government was expected to achieve its 2020 climate change target reduction of 294 million tonnes compared to 2000 levels.

In a statement, Mr Frydenberg said Australia was, "[continuing] to close the gap on the 2030 target" despite the annual increase in gas emissions.

"Australia beat its first Kyoto Protocol target by 128 million tonnes of emissions, and updated data released today by the Department of Environment and Energy shows Australia's emissions are now at their lowest level in 28 years on a per capita and GDP basis," Mr Frydenberg said.

Opposition energy spokesman Mark Butler said the Government's revised emissions targets for 2030 would only be 5 per cent below 2005 levels.

"Ignoring land sector emissions, 2030 emissions are projected to be almost 10 per cent higher than 2005 levels," Mr Butler said.

The Environment Department's long-awaited review of climate change policy found Australia accounted for 1.3 per cent of global carbon emissions.

Mr Frydenberg said the report proved the Federal Government had the right mix of policies to meet climate change goals, while also securing reliable and affordable power supply.

He said the emissions reduction fund was now, "one of the world's largest domestic carbon offset markets" with more than 191 million tonnes of abatement secured with an average of price of $11.90 per tonne.

The department report also considered the role of international emissions trading, with the Federal Government now giving "in-principle support".

This would allow businesses that have low emissions to sell excess usage to other organisations that have higher pollution rates, which may help reduce compliance costs.

"The final decision on the timing and appropriate quantity and quality limits will be taken by 2020 following further consultation and detailed analysis," Mr Frydenberg said.

Climate Council chief executive Amanda Mackenzie said the latest figures showed Australia risked becoming, "the global climate laggard".

"The consequences of worsening climate change have already been seen across Australia in 2017 alone, in the form of intensifying extreme weather events including supercharged storms, heatwaves and bushfires, along with the repeated bleaching of the Great Barrier Reef," Ms Mackenzie said.

"By failing to tackle climate change and getting Australia's pollution under control, the Government is accepting dramatic changes to our climate that will have grave consequences."