Australian Parents for Climate Action (AP4CA) has filed a civil claim against EnergyAustralia, accusing the energy company of misleading more than 400,000 customers over a product it marketed as “carbon neutral”.
The charity filed the claim in the Federal Court of Australia on Wednesday, alleging that EnergyAustralia falsely claimed its Go Neutral product has a positive impact on the environment.
AP4CA said the product is primarily generated by burning fossil fuels, and that EnergyAustralia has claimed to have offset emissions by buying carbon credits. AP4CA has estimated that EnergyAustralia customers spend hundreds of millions each year on energy produced by fossil fuels, while being misled that it is carbon neutral.
“We’ve had enough of power companies misleading us into buying polluting products. So we’re taking a stand against EnergyAustralia’s greenwashing on behalf of Australia’s parents and our children,” said Nic Seton, CEO of AP4CA.
“We simply cannot solve the climate crisis while the world’s biggest polluters rely on buying ‘offsets’; it is not scientifically possible for fossil fuel-based products to be truly ‘carbon neutral’. ‘Offsets’ are a form of marketing spin based on creative accounting, allowing fossil-fuel burners to maintain climate destroying practices and delay decarbonisation.”
David Hertzberg, a Senior Associate at Equity Generation Lawyers who is representing AP4CA, said this is the first claim in Australia that has targeted the marketing of ‘carbon neutral’ consumer products.
“Our client argues that EnergyAustralia’s promotion of its ‘Go Neutral’ product amounts to misleading or deceptive conduct, which is a contravention of the Australian Consumer Law,” Hertzberg said.
“If our client is successful, it will force EnergyAustralia to stop claiming that its ‘Go Neutral’ product is ‘carbon neutral’. It will also set a precedent for other companies, helping to strip back some of the greenwashing faced by everyday consumers.”
The case from AP4CA comes after the European parliament recently agreed it would push for a ban on businesses being able to market products as carbon neutral through offsetting programs. There are concerns that offsetting programs lack transparency and are inefficient when it comes to climate action.
“Consider the analogy of discovering your child smokes cigarettes. Your child can’t just pay other children not to smoke, and then tell you their smoking is “health neutral”. This is fundamentally deceptive behaviour and doesn’t solve the problem. Your child is still smoking,” AP4CA’s Nic Seton said.
“Why would we stand for it when energy companies mislead consumers into thinking their energy is good for the climate while continuing to pump climate-wrecking pollution into the atmosphere? These companies should instead be switching to genuinely sustainable and renewable energy.
“When companies burn fossil fuels, they harm the climate. It’s as simple as that. So when they use marketing spin like ‘offsets’ to justify business as usual, they’re cheating our kids out of a safe future.”
EnergyAustralia has strongly denied the allegations put forward by AP4CA and will defend the proceeding.
“EnergyAustralia denies the allegations of misleading or deceptive conduct in relation to our Go Neutral and PureEnergy products and intends to defend the proceeding,” an EnergyAustralia spokesperson said.
“EnergyAustralia is disappointed that the Australian Parents for Climate Action group has chosen to commence court proceedings rather than engaging with EnergyAustralia to share ideas about ways to ensure that consumers can make informed choices.
“In respect of the Go Neutral product, EnergyAustralia has complied with the Climate Active certification process and ensured the statements we make about the product are consistent with the nature of certification under the Climate Active Standard.”
EnergyAustralia said it is committed to “ensuring that consumers can make informed choices in respect of our retail energy offering”.
Carbon credits are currently a core component of the Australian government’s climate strategy. Research from ANU, UNSW, and other think tanks, has noted integrity issues with how Australia utilises carbon credits.