The ACT has surpassed its 2020 emissions reduction target, due in part to the drop in movement during the coronavirus lockdown.
Emissions dropped to 45.3 per cent below 1990 levels in 2019-20, exceeding the ACT government's target of 40 per cent.
Emissions Reduction Minister Shane Rattenbury tabled the annual report in the ACT Legislative Assembly, saying COVID-19 and Canberra's transition to 100 per cent renewable electricity had contributed to the milestone.
"Some of this was unhappily due to the way that COVID-19 impacted our economy," he said.
"And we expect there will be some rebound of transport emissions as our economy continues to recover. But we remain on the path to our longer-term emissions reduction targets."
Mr Rattenbury said transport emissions had reduced this year thanks to lockdown and an increase in people working from home, with traffic volumes and public transport use dropping considerably.
Road traffic dropped 40 per cent in March but jumped back up to 84 per cent of pre-pandemic levels by June.
In May, public transport use was down 75 per cent compared to the same time last year.
"Our next major challenges will be to reduce our emissions from transport and gas, which together account for more than 80 per cent of the ACT's emissions," Mr Rattenbury said.
The government has set a target to reduce emissions by 50 to 60 per cent by 2025, 65 to 75 per cent by 2030 and 90 per cent by 2040, on 1990 levels.
It has committed to achieve zero emissions in government operations by 2040, five years ahead of the city's 2045 target.
Government emissions were down 40 per cent in 2019-20 compared to 2018-19. Mr Rattenbury said that had been achieved due to moving to renewable electricity.
Despite the milestone, Mr Rattenbury said the Black Summer bushfires which left a chocking smoke haze over Canberra were "confronting reminders that climate change is here, and its impacts are growing".
The Bureau of Meteorology's State of the Climate report last month found as Australia continued to warm it would face more frequent extreme weather events like bushfires, droughts, and marine heatwaves.
"This is the future we must face," Mr Rattenbury said.