A landmark ‘greenwashing’ case against one of Australia’s largest energy providers has settled out of court, with EnergyAustralia issuing a formal apology.
Environmental activist group Parents for Climate accused the company of misleading customers by offering a ‘carbon neutral’ option to set up gas and electricity at a property.
Now, it has acknowledged that “carbon offsetting is not the most effective way to assist customers to reduce their emissions”.
Carbon credits
When fossil fuels (coal, gas, and oil) are burned, carbon dioxide (CO₂) is released into the atmosphere, causing warmer temperatures on earth.
In Australia, businesses and industries responsible for large carbon emissions can buy ‘carbon credits’.
This is designed to compensate for their emissions by doing things that could store more carbon on earth, like planting a tree.
EnergyAustralia is the third largest corporate emitter in Australia, according to the latest emissions data.
'Go Neutral'
EnergyAustralia rolled out a program called ‘Go Neutral’ in 2016.
It was a free opt-in for anyone using EnergyAustralia to link up electricity and gas to their home.
Under the program, EnergyAustralia claimed it would cancel out all carbon emissions from the customer’s energy usage by buying carbon credits.
On its website, EnergyAustralia claimed it was a 100% carbon neutral scheme.
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Activist group Parents for Climate brought a claim against EnergyAustralia in August 2023.
The group, led by Nic Seton, alleged EnergyAustralia’s claims were “misleading or deceptive”, in breach of Australian consumer law.
It argued the projects on which EnergyAustralia spent its carbon credits do not “undo the impacts” of its energy emissions, because they didn’t involve taking any carbon out of the atmosphere.
Settlement
The case was meant to begin in the Federal Court last week, but the parties have now settled.
As part of the settlement, EnergyAustralia acknowledged that “offsets do not prevent or undo the harms caused by burning fossil fuels”.
“Even with carbon offsetting, the emissions released from burning fossil fuels for a customer’s energy use still contribute to climate change.”
It also apologised to customers who signed up for ‘Go Neutral’, and confirmed “their electricity or gas use was still sourced predominantly from fossil fuels.”
EnergyAustralia said it has “now shifted its focus to direct emissions reductions.”
Response
Parents for Climate CEO Nic Seton welcomed the result, saying it “will set a new standard for the way carbon offset products are used by corporations and sold to consumers.”
“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.”
EnergyAustralia said it will “continue to engage constructively with Parents for Climate and other community groups as it navigates the energy transition.”
