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Challenges for lawyers in the clean energy space

As clean energy projects gain momentum and climate litigation cases continue to rise, lawyers working in these areas will experience a busy year, said this G+T trio.

user iconLauren Croft 07 February 2022 Big Law
Challenges for lawyers in the clean energy space
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The year ahead is going to be an interesting one in terms of clean energy, according to partner Michael Blakiston and special counsels Patrick Tydde and Christopher Marchesi – all from BigLaw firm Gilbert + Tobin.

Speaking recently on The Lawyers Weekly Show, the trio reflected on the past year in this practice area, what lawyers working in this space should be aware of and challenges to be aware of moving forward.

Mr Blakiston said that there had been a number of things happening in this space over the last year – in fact, there’s been “an explosion of interest” in the clean energy industry recently.


“The last 12 months have led to an explosion of interest in the space. Not because it’s something new, but it’s something that people have had time to actually address added to that is being the outcome of cop 26, where we have seen this massive interest worldwide in the target of 2050, and people are suddenly realising we’re not going to achieve that unless we actually do something positive.

“I think the other major overlay has been the response, particularly in Australia, of the government. There’s been a real split response. The federal government has been quite slow. The state governments have been very active and, in fact, quite competitive in trying to attract investor interest into their state, making their state the place to develop alternative energy sources,” he said.

“And then there’s been the role of business. And I think in the business fraternity, there’s been some very significant steps with companies setting very aggressive targets, targets that we perhaps don’t have the technology yet to achieve, but nonetheless, the challenge has been put down.”

As a result, lawyers in this space are facing a variety of challenges, particularly as it’s a fairly new industry, Mr Marchesi added.

“When we talk about the energy transition, there [are] numbers thrown at it that’ll cost in excess of 10 trillion dollars to scale the challenge. And the predictions are that the electricity supply in the world will need to quadruple and that’s just for hydrogen. And in order to do that, the international energy agencies predicted that there’ll need to be in excess of 100 super-sized hydrogen hubs, and 40 of those will be needed for the shipping sector only. And when we talk about what these hydrogen hubs are, they require a capital investment of 35 to 40 billion dollars. So, it’s an enormous challenge,” he explained.

“So, how do you deliver those projects? Well, just like any other project that you deliver, you need to get started. And in order to do that, investors need to have confidence. And the way they have confidence is through very clear government policy and direction. That’s the challenge in Australia at the moment for the leaders to get their heads around, firstly, the scale of the challenge, and then how do we get there? Because these projects need to start today.”

Another key trend in this space is greenwashing, which Mr Tydde explained as companies “overselling [their] net zero or climate change policies and painting a better picture than is in fact the case”.

“Companies for a little while now have accepted that they need to disclose to the markets their approach to climate risk and net zero targets and so on,” he said.  

“But there’s groups of climate activists who are looking at companies now and the sort of disclosures that are being made and taking them to task if the disclosures are not entirely accurate or if they perceive that there isn’t a proper basis for the company actually making that disclosure.”

There have been a number of notable cases wherein companies have been accused of greenwashing, Mr Tydde added.

“The big piece of litigation that gathered a lot of press this year was the case against Shell by the Friends of the Earth in the Netherlands. In summary, what the court found in that case was that Shell was required to reduce its direct and indirect carbon dioxide emissions by at least 45 per cent as compared to 2019 levels by the end of 2030. And that was because they found that Shell owed a duty under Dutch law to mitigate adverse human rights impacts arising from climate change.

“Now that’s a really significant decision from the environmental perspective, because it’s the first occasion where a company’s been legally required by a national court to take action to comply with the Paris Agreement by the significant reduction obligation that was imposed on Shell,” he said.

“The concept of inadequate disclosures or inaccurate disclosures made by companies is an area where we have seen a lot of class action litigation in recent years. In terms of what corporates can do to try and limit the risk of this, don’t try to oversell your story. You do need to have a position on net zero and climate change, and you need to disclose what that is, but be realistic in what you are saying about that; otherwise, you can get some pretty nasty press and some pretty nasty comments made through the courts.”

And according to Mr Marchesi, as climate litigation increases and the climate crisis continues, 2022 is set to be an interesting year as the industry faces regulatory changes and supply chain issues.

“We’re going to be seeing projects being put in front of regulators for approvals, and so we’re going to be seeing pressure on regulators in making these decisions and balancing some of the competing interests in terms of different stakeholders and appeasing certain aspects of the community. We’re [also] going to see a big advancement in the area of certification that’s around how green a particular product is,” he added.

“And then finally, we’re going to see these global pressures in relation to supply chains. We’ve got these large organisations internationally setting very aggressive targets and looking to companies in Australia that supply them commodities and minerals to display to them that the products that they’re supplying don’t have the carbon, which is inconsistent with all of the global pathways. So, it’s going to be a really, really interesting year as we start to see all the concepts and plans talked about this year starting to be really put into action.”

The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Michael Blakiston, Patrick Tydde and Christopher Marchesi, click below: