Greenhouse gas emissions in NSW have only decreased by 1 per cent since 1990, despite an increased focus by state and federal governments to combat the effects of climate change.
The NSW State of the Environment report was released on Saturday by state Environment Minister Mark Speakman.
It revealed that while residents are being praised for their efforts with recycling, an overwhelming 94 percent of people in NSW got their energy from non-renewable sources.
This statistic, environmental groups said, was concerning for the future.
"It's time for NSW to move away from the 20th century's fuel sources and get serious about the transition to sustainable forms of energy," said Dr Paul Sinclair, the Australian Conservation Foundation's campaign director.
The report, which is released every three years, showed a tiny reduction in greenhouse gas emissions.
But Mr Speakman said the state was managing resources better than ever, pointing out positive growth in the number of people using recycling services.
"In 2012-13, NSW recycled 10.5 million tonnes compared with 5.3 million tonnes in 2002-03, despite an increase in population," Mr Speakman said.
The report acknowledges there has been a greater education surrounding recycling in the last decade, as well as increased availability within the community for recycling programs, such as the ability to collect organic waste.
The report calls attention to the use of transport, both public services and private car use, as a significant factor in the creation of fossil fuels, as transport contributes 19 percent NSW greenhouse gas emissions.
It reveals that although NSW commuters are using more public transport, cars are still the main mode of transport, with 69 per cent of people driving to get around.
It also said transport has "undergone almost uninterrupted growth, with forecasts indicating continued growth", something Dr Sinclair says calls for a rethinking of the way Australian cities are built.
"Massive new investment is needed in public transport infrastructure and green infrastructure, increasing the amount of parkland in our cities, building rooftop cities and moving towards fully electrifying our public transport system so it can be run on renewable energy and not reliant on fossil fuels," he said.
Overall energy use in NSW was rated 'poor' by the report, and noted 66 per cent of NSW emissions come from the combustion of fossil fuel, 10 per cent from mining.
Mr Speakman acknowledged there is progress to make.
"The report highlights the government's achievements in working for a healthy future but also shows there is room for improvement and challenges ahead," said Mr Speakman.
One such improvement, which was listed under "responses" in the report, is the $100 million Coal Innovation NSW Fund to "carry out research, development, demonstration and public awareness of raising low emissions coal technologies".
The report looked at every aspect of the state's environment – from water use, which was lower than in 1990, to the growing population and the reduced abundance of waterbirds at wetlands.
Rivers in NSW got a 'moderate' health rating, however the Murray-Darling basin was called 'poor', but the report noted it was a "stable" trend.