An increase in the use of renewables and a weaker economy weighed down by higher energy costs had contributed to a 10.1-percent plunge in carbon emissions year-on-year, the economy ministry said.
Germany, Europe's biggest economy, aims to reduce CO2 emissions by 65 percent by 2030 and achieve climate neutrality by 2045.
The latest report from Germany's federal environment agency (UBA) showed that emissions were now projected to fall by almost 64 percent by 2030, compared with 1990 levels.
In a 2021 report, that figure was estimated at just 49 percent.
"The projection shows for the first time that we are on course and that we can achieve the 2030 climate protection goals," Economy Minister Robert Habeck said at a Berlin press conference.
The optimism comes after Germany lowered its CO2 emissions by 76 million tonnes last year to 673 million tonnes -- the biggest reduction since German reunification.
The drop was in large part driven by an industrial downturn, as companies in energy-intensive sectors such as aluminium, steel and chemical production were battered by higher energy prices and lower demand.
Coal use also declined as Germany became a net importer of electricity in 2023. Around 60 percent of those energy imports -- mainly from Scandinavian countries -- came from renewable sources.
- 'Light and shadow' -
Habeck said 2023 had been a year of "light and shadow", with the German economy shrinking by 0.3 percent and forecast to grow only moderately this year.
He said the government was counting on a "full economic recovery" and that the right instruments were in place to keep up the momentum on climate protection.
Renewables, which for the first time generated more than half of Germany's electricity supply in 2023, now formed "the backbone" of the nation's energy supply, Habeck said.
The government has also launched several schemes to incentivise green technology projects, he said, including investments in hydrogen and a recently unveiled subsidy programme to decarbonise industrial production.
Legislation aimed at phasing out gas and oil heating in buildings is forecast to lead to a shift towards more environmentally-friendly heat pumps in the coming years.
The "price shock" triggered by the end of cheap Russian energy imports, meanwhile, had led to a shift in behaviour, Habeck said, with consumers more aware of the benefits of conserving energy.
Habeck acknowledged that the transport sector, which has consistently failed to meet its carbon reduction targets, remained the "problem child" of Germany's climate efforts.
Emissions savings in other sectors would have to "overcompensate" for the expected shortcomings in transport, he said.
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