A landmark “greenwashing” case against one of Australia’s largest energy providers has kicked off in the Federal Court.
Environmental activist group Parents for Climate has accused EnergyAustralia of misleading customers by offering a “carbon neutral” option to set up gas and electricity at a property.
It argues the company’s claims to “cancel out” the emissions through programs, like planting trees and building wind farms, are “deceptive”.
EnergyAustralia has since removed the carbon neutral opt-in and denies it misled customers.
Carbon credits
When fossil fuels (coal, gas, and oil) are burned, carbon dioxide (CO₂) is released into the atmosphere, causing warmer temperatures on earth.
In Australia, businesses and industries responsible for large carbon emissions can buy ‘carbon credits’.
This is designed to compensate for their emissions by doing things that could store more carbon on earth, like planting a tree.
Carbon credits are bought and sold on a ‘carbon market’.
Think of the carbon market like a carnival, attended by businesses.
A business buys tickets (credits) and can use those tickets to go on different rides (offset schemes).
An offset scheme could involve planting trees, or investing in renewable energy projects like solar panels.
The aim for businesses is to balance the amount of carbon they produce with offsets. Climate groups have long warned that it doesn’t meaningfully bring down emissions and should be a “last resort”.
'Go Neutral'
EnergyAustralia rolled out a program called ‘Go Neutral’ in 2016.
It was a free opt-in for anyone using EnergyAustralia to link up electricity and gas to their home.
Under the program, EnergyAustralia claimed it would cancel out all carbon emissions from the customer’s energy usage.
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On its website, EnergyAustralia claimed it was a 100% carbon neutral scheme.
EnergyAustralia bought carbon credits for programs such as wind farms to replace fossil fuel projects in India and Chile.
Another project involved converting methane to carbon dioxide at a waste centre in Brazil.
EnergyAustralia is the third largest corporate emitter in Australia, according to the latest emissions data published for 2023/24.
Lawsuit
Activist group Parents for Climate brought a claim against EnergyAustralia in August 2023.
The group, led by Nic Seton, alleged EnergyAustralia’s claims were “misleading or deceptive”, in breach of Australian consumer law.
It argues the projects on which EnergyAustralia spent its carbon credits do not “undo the impacts” of its energy emissions, because they didn’t involve taking any carbon out of the atmosphere.
After the lawsuit was launched in 2023, the company removed references to the Go Neutral program from its website.
Seton told TDA the case is responding to customers who are “increasingly frustrated and disappointed by the level of greenwashing they’re experiencing“.
“The era of unchecked greenwashing of climate claims, using language like ‘carbon neutral’, just to make a product look good without actually reducing pollution in the first place: that has to stop.“
A two week trial is due to start later today.
EnergyAustralia
EnergyAustralia rejects the claims of greenwashing and “misleading or deceptive” conduct.
The Go Neutral option contained descriptions that it would mean a customer’s energy would be “carbon neutral”. This, according to EnergyAustralia’s defence, would be seen by a reasonable person as an expression of “opinion”.
In a statement to TDA, a spokesperson for EnergyAustralia said the company “remains committed to decarbonising… and helping our customers to directly reduce their emissions.”
