The Australia Institute has filed a complaint with the ACCC on the basis that the Australian Government’s ‘carbon neutral’ certification scheme, Climate Active, may be misleading and deceptive under consumer law.

The Climate Active scheme certifies Australian businesses who have offset some of their emissions including fossil fuel retailers AGL, Energy Australia, Origin Energy, Ampol and Telstra. Climate Active promotes its trade mark as a way to “stand out from competitors “ and make it easier to “identify and choose brands that are making a real difference”.

However, polling by the Australia Institute published today shows that while 85% of Australians have heard of the term carbon neutral only 33% of Australians know what it means raising the question of whether Climate Active is misleading consumers by promoting companies that use offsets instead of decarbonising as “progressive climate leaders”.

The complaint comes in the wake of ACCC’s claims that around 42% of environmental claims in Australia may be fraudulent and are providing firms with an unfair competitive advantage. It also follows recent media investigations revealing that the offsets Climate Active endorses to its members are fraudulent.

Key points:

• Environmental Defenders Office filed a complaint on behalf of the Australia Institute that Climate Active may be in breach of Section 18 of the Australian Consumer Law (ACL) states:   A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
• Commonwealth governments are immune from prosecution under the ACL. However, Climate Active is carrying on a business and within trade or commerce as certified businesses pay a licence fee through a licensing agreement to use the Climate Active trademark and to become a member of the Climate Active network. The program competes with other non-government carbon neutral certification schemes.
• Climate Active has certified a number of fossil fuel companies and retailers for offsetting a portion of their emissions.
  • Cooper Energy claims to be a carbon neutral organisation for offsetting 0.4 per cent of its emissions while planning to double its gas production. Tokyo Gas and NeuRizer are also ‘carbon neutral’ organisations.
  • Origin, Ampol and Energy Australia are among a number of fossil fuel companies with ‘carbon neutral certified products’.

• In a parliamentary committee last year the ACCC flagged that “large proportions of consumers are making purchasing decisions on the basis of the sustainability of products”.
• Polling by the Australia Institute shows that consumers are likely to be misled by claims of carbon neutrality:
  • An overwhelming majority of Australians (85%) have heard the term carbon neutral, but just one in three (33%) know what it means.
  • Fewer Australians have heard of net zero (60%) and just over one in ten (14%) know what net zero means.
  • Three in five Australians (58%) think all emissions from business operations, products and services should be accounted for when making a claim of carbon neutrality.
  • One in three (33%) agree that carbon neutral electricity has the same impact as 100% renewable energy.
  • Two in five (39%) Australians say that there would be less need for EVs if all petrol was carbon neutral (31% disagree, 30% don’t know).

“On the one hand government regulators are trying to crack down on greenwash, and on the other hand the government is certifying greenwash. Its no wonder the public don’t know what to believe,” said Polly Hemming, Acting Climate & Energy Program Director at the Australia Institute.

“Gas companies should not be allowed to grow their emissions while lauding carbon neutral claims but they are and what is worse the federal government is certifying it.

“The country is suffering from state-sponsored greenwashing and it is undermining Australia’s emission reduction efforts and international reputation.

“Promoting fossil fuel companies as climate leaders punishes companies with legitimate climate ambition. It rewards greenwashing while credible claims are unrecognised and unrewarded.”