EnergyAustralia has apologised to its customers and says it has shifted to “direct emissions reductions” after settling a legal battle over accusations it was “greenwashing”.
Environmental advocacy group Parents for Climate took action in the Federal Court in 2023 alleging misleading or deceptive conduct over the energy giant’s marketing of its Go Neutral carbon offset product and the matter was set down for hearings this month.
The allegations related to the company buying carbon credits to offset the pollution from their electricity or gas customers’ energy use that was “still sourced predominantly from fossil fuels”.
Greenwashing is when something is made to appear more environmentally friendly than it is.
EnergyAustralia said offset programs are no substitute for not burning fossil fuels in the first place. (ABC News: Monish Nand)
In a statement published on Monday as part of the settlement, Energy Australia said it “acknowledges that carbon offsetting is not the most effective way to assist customers to reduce their emissions”.
“While offsets can help people to invest in worthwhile projects that may reduce greenhouse gas emissions elsewhere, offsets do not prevent or undo the harms caused by burning fossil fuels for a customer’s energy use,” it said.
The company said it “apologises to any customer who felt that the way it marketed its Go Neutral products was unclear” and that it has “has now shifted its focus to direct emissions reductions”.
“Burning fossil fuels creates greenhouse gas emissions that are not prevented or undone by carbon offsets,” the statement said.
“This could have been made clearer to customers.
“Storing carbon in plants is not equivalent to keeping it stored in fossil fuels (by not burning those fossil fuels in the first place).”
The Federal Court was expected to hear the case this month. (AAP: Bianca De Marchi)
EnergyAustralia’s chief customer officer Kate Gibson said the benefits of offsets had been questioned in recent years and the company accepts that there is legitimate public concern about the efficacy of these programs.
“Carbon offsets should not be used to delay or diminish the important work that needs to be done to actively decarbonise,” she said.Â
“EnergyAustralia is now focused on more effective ways of helping its customers to directly reduce the emissions associated with their energy use.”
‘Real action … not marketing spin’
Parents for Climate were seeking the company issue a corrective notice and for the court to make a declaration the EnergyAustralia engaged in greenwashing.
Key to their case was the claim that customers believed their fossil fuel consumption would be neutralised by renewable projects as part of EnergyAustralia’s Go Neutral program.
Parents for Climate CEO Nic Seton said greenwashing delayws climate action. (Supplied: Nic Seton)
Parents for Climate CEO Nic Seton said it was a “historic acknowledgement” and showed “climate action must be backed by real action … not marketing spin”.
“It will set a new standard for the way carbon offset products are used by corporations and sold to consumers,” he said.
“This isn’t just about EnergyAustralia — it’s about holding companies to a higher standard across the board.
“Greenwashing isn’t harmless. It’s costing families money, delaying climate action, and eroding trust.”
How environmental spin shows up in household appliances
The company began the Go Neutral scheme in 2016 but stopped offering it mid last year, claiming it is continuing to phase it out for residential customers this year.
The Parents For Climate said it was the first case in an Australian court for “carbon neutral” marketing.