In the legal claim, filed by Equity Generation Lawyers for AP4CA, EnergyAustralia is accused of misleading customers by marketing its Go Neutral product as “carbon-neutral” and having “a positive impact on the environment” when it is primarily generated by burning fossil fuels, which the company claims to have “offset” simply by buying carbon credits.

This is the first Australian civil action brought against a company for marketing a specific consumer product as “carbon-neutral” and follows recent agreement by lawmakers in the European Parliament to ban this act overseas.

This news comes after the Australian Securities and Investments Commission (ASIC) launched proceedings against Vanguard for greenwashing, following a crackdown on greenwashing in recent months, bringing its first court action for greenwashing in February this year and warning of more to come in March.

In late March, an Australian Competition and Consumer Commission (ACCC) complaint was lodged against Etihad Airways after the airline displayed allegedly greenwashed advertisements during a 2022 soccer match, following civil proceedings launched by ASIC against Mercer Super back in February and Future Super receiving an infringement notice from ASIC in May after concerns were raised about a Facebook post.

According to the claim against EnergyAustralia, “Go Neutral” customers were led to believe EnergyAustralia products were carbon-neutral, but AP4CA estimates that hundreds of millions of dollars were spent on fossil fuel energy instead – something which AP4CA chief executive Nic Seton said cannot continue.

“Australian parents want our energy to be clean and renewable because our children rely on us to create a safe and sustainable world for their future. We’ve had enough of power companies misleading us into buying polluting products. So, we’re taking a stand against EnergyAustralia’s greenwashing on behalf of Australia’s parents and our children,” he said.

“We simply cannot solve the climate crisis while the world’s biggest polluters rely on buying ‘offsets’; it is not scientifically possible for fossil fuel-based products to be truly ‘carbon-neutral’. ‘Offsets’ are a form of marketing spin based on creative accounting, allowing fossil-fuel burners to maintain climate destroying practices and delay decarbonisation.”

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Equity Generation Lawyers senior associate David Hertzberg confirmed that this is the “first case in Australia targeting the marketing of consumer products as ‘carbon-neutral’.”

“Our client argues that EnergyAustralia’s promotion of its ’Go Neutral’ product amounts to misleading or deceptive conduct, which is a contravention of the Australian Consumer Law,” he said.

“If our client is successful, it will force EnergyAustralia to stop claiming that its ’Go Neutral’ product is ‘carbon neutral’. It will also set a precedent for other companies, helping to strip back some of the greenwashing faced by everyday consumers.

“Consumers deserve to know the truth about what they are buying. And the truth is that fossil fuel energy can never be ‘carbon neutral’.”

EnergyAustralia is Australia’s third-largest carbon polluter and Australia’s third-largest energy company, with 1.6 million customers. It owns multiple power stations, including Australia’s most carbon-intensive station located at Yallourn, Victoria.

“Why would we stand for it when energy companies mislead consumers into thinking their energy is good for the climate while continuing to pump climate-wrecking pollution into the atmosphere? These companies should instead be switching to genuinely sustainable and renewable energy,” Mr Seton said.

“When companies burn fossil fuels, they harm the climate. It’s as simple as that. So, when they use marketing spin like ‘offsets’ to justify business as usual, they’re cheating our kids out of a safe future.”