Australian Parents for Climate Action v EnergyAustralia (Offsets Greenwashing)

Federal Court of Australia l NSD833/2023

Equity Generation Lawyers represents Australian Parents for Climate Action (AP4CA) in a landmark action challenging allegedly misleading statements made by EnergyAustralia about its “carbon neutral” energy products.

AP4CA is a climate advocacy organisation that works for parents, carers and families who want to create a safer future for their children. 

The action was filed on 9 August 2023 in the Federal Court of Australia. The pleadings are available for download at the end of this page.

Background to the claim

EnergyAustralia produces and sells electricity and is Australia’s third largest domestic greenhouse gas emitter, producing 16.2 million tonnes of CO2 equivalent in 2021/22.

EnergyAustralia offers “Go Neutral Electricity” and “Go Neutral Gas” products.  “Go Neutral” customers purchase energy which is mainly sourced from burning fossil fuels and EnergyAustralia promises to purchase carbon credits to “offset” the associated emissions.

The “Go Neutral” products require consumers to opt-in but there is no additional cost to the consumer.

EnergyAustralia on its website claims that:

1. “Go Neutral” electricity and gas is “carbon neutral”;
   
2. Emissions created by “Go Neutral” electricity and gas are “cancelled out” or “negated”;
   
3. By opting into “Go Neutral” products, consumers “have a positive impact on the environment”.

What the claim alleges

AP4CA argues that EnergyAustralia’s marketing of its “Go Neutral” products amounts to misleading or deceptive conduct contrary to section 18 of the Australian Consumer Law.

AP4CA argues that carbon offsets do not “cancel out” or “neutralise” the emissions generated by “Go Neutral” energy, and that using “Go Neutral” energy does not have a positive impact on the environment. This is because, in summary:

1. Paying someone else to avoid generating emissions (known as an “avoidance” credit)  does not undo the impact of the emissions generated from “Go Neutral” energy. This is because avoidance credits do not involve removing any CO2 from the atmosphere, and there is inherent uncertainty in whether avoidance credits have achieved what they claim to achieve. Almost 99% of EnergyAustralia’s carbon credits are avoidance credits;
2. Paying someone else to flare methane (which is a type of “avoidance” credits) not only suffers from the same problems that all avoidance credits have, it results in a significant additional increase in the concentration of greenhouse gases because there is a lack of equivalence between short-lived methane and effectively permanent CO2 emissions;
3. Paying someone else to remove carbon emissions from the atmosphere (known as a “removal” credit) does not cancel out or negate the emissions generated from “Go Neutral” energy because the carbon removal projects EnergyAustralia buys are short-lived and not permanent; 
4. The emissions from “Go Neutral” ultimately result in an increase in the concentration of greenhouse gases in the atmosphere, which exacerbates climate change and global warming.

AP4CA also argues that EnergyAustralia’s renewable energy product “PureEnergy” was not given the same prominence on its website as “Go Neutral”, meaning customers could not compare both products. 

EnergyAustralia’s Defence

In its Defence, EnergyAustralia denies that it made the alleged representations on its website and denies that the representations were misleading or deceptive (if they were made).

It also says that the statements in its website would have been understood as expressions of EnergyAustralia’s opinion rather than as statements of fact.  

AP4CA, in its Reply, maintains that the statements on EnergyAustralia’s website would have been understood as statements of objective fact.

Remedy sought

AP4CA seeks a declaration that EnergyAustralia has misled its customers since 2019 about the greenhouse gas emissions associated with their electricity and gas usage. 

AP4CA also seeks an order that EnergyAustralia be restrained from making “carbon neutral” or similar statements to describe the “Go Neutral” product, and that it issue a corrective statement to its customers. 

Pleadings

You may download copies of the pleadings below:

Amended Statement of Claim
Defence
Reply

Progress of proceeding and next steps

On 19 December 2023, the Court made orders requiring EnergyAustralia to provide discovery of certain categories of documents.  Those orders are available here.

In February, March and April 2024, EnergyAustralia produced several tranches of documents on discovery.

On 11 April 2024, the Court made orders requiring AP4CA to file and serve its expert evidence by 3 May 2024.  Those orders are available here.

The proceeding is listed for a case management conference on 23 May 2024.

AP4CA’s Legal Team

AP4CA is represented by Equity Generation Lawyers.

AP4CA’s counsel are Robert Dick SC and Jerome Entwisle.