400,000 Australians Deceived: Energy Giant Admits Carbon Neutral Claims Were A Lie

A major Australian energy company has been caught making misleading claims about its environmental impact. EnergyAustralia is facing legal action in Federal Court for allegedly deceiving more than 400,000 customers about its “Go Neutral” carbon offset product.

EnergyAustralia faces federal lawsuit for misleading 400,000+ customers with dubious carbon offset marketing claims.

The lawsuit, filed by Parents for Climate in July 2023, claims the company violated Australian Consumer Law by marketing fossil fuel energy as “carbon neutral.” Customers were led to believe their energy use wasn’t hurting the environment when they purchased the offset program.

This is the first Australian court case against an energy provider for “greenwashing” related to carbon neutral marketing. Customers collectively paid hundreds of millions of dollars annually for what they thought were climate-friendly energy options.

Carbon offsets don’t actually erase the emissions from burning fossil fuels or prevent climate damage. EnergyAustralia has since admitted that offsets aren’t the most effective way to reduce emissions, but this wasn’t clearly disclosed to customers who paid premium prices.

The case has exposed serious gaps in consumer protection against misleading environmental claims. A recent survey found three in four Australians believe government regulators, not corporations, should verify climate claims. This controversy highlights the growing consumer concern about carbon footprints as 68% of consumers worldwide express worry about climate change.

Australian regulators have recently fined several companies for misrepresenting their environmental credentials. The government’s Climate Active certification program, which approved EnergyAustralia’s claims for nearly a decade, is now facing intense scrutiny and an ACCC complaint.

Following the legal challenge, EnergyAustralia issued a public apology to customers for unclear marketing. The company acknowledged that carbon offsetting doesn’t undo the harm from fossil fuel use and promised to shift focus from offsetting to direct emissions reductions. The company also settled the case before it went to Federal Court, acknowledging wrongdoing in its carbon neutral marketing claims. The company is also planning to install large batteries at their coal plant sites as part of Australia’s transition away from polluting fuels.

This case coincides with increased global attention to “carbon neutral” marketing. European lawmakers have already moved to ban misleading carbon neutral claims, potentially setting a precedent for Australia to follow as consumers demand greater transparency in environmental marketing.