Parents For Climate sue EnergyAustralia for greenwashing

In an Australian first, Parents for Climate has filed a claim in the Federal Court of Australia against EnergyAustralia for misleading over 400,000 consumers about the climate impact of its products.

Parents for Climate alleges that EnergyAustralia is misleading customers by marketing its Go Neutral product as “carbon neutral” and having “a positive impact on the environment” when it is primarily generated by burning fossil fuels, which the company claims to have “offset” simply by buying carbon credits.

This will be the first Australian civil action brought against a company for marketing a specific consumer product as “carbon neutral” and follows recent agreement by lawmakers in the European Parliament to ban this act overseas.

Parents for Climate estimates that 'Go Neutral' customers spend hundreds of millions a year on fossil fuel energy, while being led to believe that it is “carbon neutral”

Nic Seton, CEO of Parents for Climate, said: “Australian parents want our energy to be clean and renewable, because our children rely on us to create a safe and sustainable world for their future.

“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.

“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.

“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.

“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.”

David Hertzberg, Senior Associate at Equity Generation Lawyers, representing Parents for Climate said, “This is the first case in Australia targeting the marketing of consumer products as 'carbon neutral'.

"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.

"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.

"Consumers deserve to know the truth about what they are buying. And the truth is that fossil fuel energy can never be 'carbon neutral’."

EnergyAustralia is Australia’s third-largest carbon polluter and Australia’s third-largest energy company, with 1.6 million customers. It owns multiple power stations including Australia’s most carbon-intensive station located at Yallourn, Victoria, on top of retailing electricity and gas to consumers. 

Parents who want to support Parents for Climate’s work against misleading advertising can sign their open letter to power companies at ap4ca.org/greenwashing

A media event with David Hertzberg from Equity Generation Lawyers, Parents for Climate CEO Nic Seton, and Parents for Climate parent members will be held on the steps of the Law Courts Building, Queens Square, Sydney at 2pm on Wednesday 9 August 2023. All spokespeople will be available for photos and quotes or interviews.

Photo and video capture of the media event will be available from 3pm on Wednesday 9 August at ap4ca.org/greenwashmedia

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Parents for Climate (www.parentsforclimate.org) is Australia’s leading climate advocacy organisation for parents, carers, families and all who care about a safe future for kids, representing almost 20,000 active parents.

Parents for Climate has been at the forefront of securing renewable energy in schools, such as the NSW Smart Energy School Pilot Project. The NSW Smart Energy School Pilot Project (part of $71m awarded across TAS, WA and NSW) came into existence after a two-year Parents for Climate campaign attracted 12,000 signatories, pledges from 135 federal election candidates (including 23 elected representatives from all major parties and the crossbench), and strong support from the City of Sydney and NSW Education Minister Sarah Mitchell.

ADDITIONAL BACKGROUND

Who is the claim against?

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

The claim focuses on EnergyAustralia’s “Go Neutral Electricity” and “Go Neutral Gas” products.

What do the Go Neutral products do?

“Go Neutral” consumers purchase energy from EnergyAustralia which is mainly sourced from burning fossil fuels.  EnergyAustralia promises to purchase carbon credits to “offset” the associated emissions.  EnergyAustralia customers pay no additional fee to opt into these products.

Why does Parents for Climate say EnergyAustralia’s claims are misleading?

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

EnergyAustralia makes a number of claims on its website, including that:

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

Parents for Climate alleges that these and other representations are misleading to consumers.  This is because, in short, carbon credits do not eliminate emissions.  Fossil fuels are used to create the majority of energy sold by EnergyAustralia, the emissions created last thousands of years in the atmosphere, and these emissions are not cancelled out by the carbon credits EnergyAustralia buys.  Parents for Climate argues that EnergyAustralia buying carbon credits to “offset” emissions is not equivalent to avoiding creating the emissions in the first place.  

A carbon credit or offset represents one tonne of carbon dioxide equivalent deemed to be stored or avoided by a project.  There are, broadly, two types of carbon credits: (i) avoidance credits, which claim to reduce or avoid future emissions of other emitters; and (ii) removal credits, which claim to remove emissions from the atmosphere and store them for the period of the offset project.

AP4CA argues that:

• Using carbon credits that are avoidance based credits, which claim to reduce forecast greenhouse gas emissions, does not physically remove any greenhouse gases from the atmosphere.  That means that emissions from “Go Neutral” energy are not “cancelled out”, and the overall result is net positive emissions released into the atmosphere.  Over 99% of carbon credits used by EnergyAustralia are avoidance credits.  An example of an avoidance credit project is a program to enhance energy efficiency (e.g. updating inefficient cook stoves or replacing incandescent light bulbs with fluorescent LED lights) or the deployment of renewable energy to replace planned fossil fuel power plants (e.g. a wind farm).
  
  
• Using carbon credits that are removal based credits, which involve taking CO2 from the atmosphere and storing it in organic matter, results in carbon being shifted from a near-permanent form of storage in fossil fuels in the ground (e.g. coal and gas) to a short-term and unstable form of storage in biotic sinks (e.g. trees or soil).  That means that emissions from “Go Neutral” energy that are based on removal credits are not “cancelled out” fully or permanently, and the overall result is net positive emissions released into the atmosphere.  An example of a removal credit project with short lived storage is a project which involves growing trees or soil carbon enhancement.
  
  
• As a result, among other things, “Go Neutral” customers’ energy use is not “carbon neutral”, their emissions have not been “cancelled out” and they are not having a “positive impact on the environment”.

What is the impact of EnergyAustralia misleading consumers of the GoNeutral Products?

As a consequence of EnergyAustralia’s alleged greenwashing of its energy products, consumers who may otherwise have changed their behaviour to limit their emissions or to purchase energy sourced from renewable sources may not change their behaviour. For example, a consumer considers whether to use their clothes dryer or to instead hang their washing to dry.  The consumer who has “carbon neutral” electricity may choose to use the dryer, believing that using the dryer has no negative carbon/ climate impact.  Likewise, a consumer interested in protecting the climate may be misled into believing that the Go Neutral products have the same environmental impact as a power plan sourced from renewable energy.