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In July 2023, the advocacy organisation Parents for Climate launched legal action against EnergyAustralia in the Federal Court of Australia alleging that EnergyAustralia's marketing of its Go Neutral carbon offset product amounted to misleading or deceptive conduct contrary to the Australian Consumer Law.
Today, EnergyAustralia acknowledges that carbon offsetting is not the most effective way to assist customers to reduce their emissions and apologises to any customer who felt that the way it marketed its Go Neutral products was unclear. EnergyAustralia has now shifted its focus to direct emissions reductions.
Greenhouse gases are harmful to the environment and contribute to climate change. 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. Even with carbon offsetting, the emissions released from burning fossil fuels for a customer’s energy use still contribute to climate change.
EnergyAustralia and Parents for Climate have agreed to settle the legal action and to the publication of this statement.
Withdrawal of EnergyAustralia’s Go Neutral product
EnergyAustralia launched its Go Neutral product in 2016 with the objective of providing customers with a way to offset emissions generated by their electricity or gas consumption. However, where a residential customer opted in to the Go Neutral product, their electricity or gas use was still sourced predominantly from fossil fuels. Burning fossil fuels creates greenhouse gas emissions that are not prevented or undone by carbon offsets. This could have been made clearer to customers.
EnergyAustralia acknowledges the importance of consumers understanding the climate impact of products and services offered to them and that offsets are not the most effective means of reducing greenhouse gas emissions. There are legitimate concerns about organisations:
- using offsets instead of reducing their own emissions;
- using offset projects that do not permanently remove carbon from the atmosphere;
- supporting offset projects where climate benefits are uncertain or would happen anyway; and
- using carbon neutrality marketing claims based on the use of carbon offsets, which may cause some consumers to think there is no environmental impact from a product or service offered by a business.
Some carbon offsets claim to remove carbon dioxide from the atmosphere by planting trees or forest regeneration. However, EnergyAustralia today accepts the scientific consensus that these “offsets” do not indefinitely remove greenhouse gas emissions from burning fossil fuels, because carbon is stored in plants for a substantially shorter time than those emissions remain in the atmosphere. Storing carbon in plants is not equivalent to keeping it stored in fossil fuels (by not burning those fossil fuels in the first place).
While high quality carbon offsets may play a role for hard to abate residual emissions, it is important for organisations to provide clear and transparent information to consumers on where and how offsets have been used and what those offsets can achieve.
EnergyAustralia’s Chief Customer Officer, Kate Gibson said a decision was taken to withdraw the Go Neutral product from market in July 2024.
“In recent years, questions have begun to emerge about the benefits of carbon offsets, including those offered as part of certified Government programs such as Climate Active and whether they are having the impact intended,” said Ms Gibson.
“While EnergyAustralia participated in the Climate Active certified carbon offset program in good faith, today EnergyAustralia 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. EnergyAustralia is now focused on more effective ways of helping its customers to directly reduce the emissions associated with their energy use.”
EnergyAustralia’s future focus
EnergyAustralia’s future focus is firmly on direct decarbonisation initiatives. EnergyAustralia no longer offers its Go Neutral products to new residential customers and is phasing the product out for existing residential customers during 2025. Instead, EnergyAustralia’s Climate Action Transition Plan first launched in 2023 is focused on taking steps to offer products and services that lead to direct decarbonisation. As one of Australia’s largest energy companies, EnergyAustralia recognises the crucial role it plays in decarbonisation initiatives and managing the impacts of these initiatives on customers and the Australian community.
EnergyAustralia has made a commitment to net-zero greenhouse gas emissions for its generation operations by 2050 and is on track to reduce those emissions by over 60% in 2028 compared to its 2019 baseline. EnergyAustralia intends to achieve this by reducing its reliance on coal generation including through the closure of its Yallourn coal-fired Power station before 2030 and the closure of its Mt Piper coal fired power station before 2040. EnergyAustralia aims to expand the amount of renewable energy in its portfolio and is investing in technologies like grid scale batteries and pumped hydro to allow more renewable energy into the system.
EnergyAustralia also sees the reduction in emissions created by the consumption of energy by its customers as a key focus area for its future operations. This was outlined in 2024 in its Climate Transition Action Plan. EnergyAustralia is providing options for customers to directly decarbonise including:
- high quality rooftop solar installations and battery products sold through our EA Solar business;
- EnergyAustralia’s Battery Ease, which allows eligible customers to participate in EnergyAustralia’s Virtual Power Plant through a bring-your-own battery arrangement; and
- EnergyAustralia’s Community Battery Ease, which allows eligible customers in 13 NSW postcodes to participate in a lower cost energy plan that EnergyAustralia can offer as a result of the reduced cost to deliver energy to their homes through Community Battery initiatives.
EnergyAustralia is actively seeking to expand its virtual power plant and community battery offerings, commencing initiatives that provide opportunities to store and use more energy at times where renewables are more prevalent in the system. It is also seeking to launch electric vehicle offerings for customers.
Engagement between Parents for Climate and EnergyAustralia
EnergyAustralia recognises the important role that climate advocacy groups play in representing the interests of the Australian community. It proposes to continue to engage constructively with Parents for Climate and other community groups as it navigates the energy transition.
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