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

EnergyAustralia has admitted its “carbon neutral” claims were false in a landmark legal settlement with Parents for Climate on May 19, 2025. The energy giant acknowledged that carbon offsetting does not undo the harm caused by burning fossil fuels and issued a public apology to its customers.

In a landmark settlement, EnergyAustralia admitted its “carbon neutral” marketing was false, acknowledging offsets don’t negate fossil fuel damage.

The case began when Parents for Climate launched legal action in mid-2023, challenging EnergyAustralia‘s marketing of its “Go Neutral” products. The company had told over 400,000 customers that their fossil fuel-based energy was “carbon neutral” and claimed customers “had a positive impact on the environment” by purchasing these products.

In the settlement, EnergyAustralia made several key admissions. The company stated that “emissions released from burning fossil fuels still contribute to climate change” despite carbon offsetting efforts. They also acknowledged that carbon offsetting isn’t the most effective way to reduce emissions. This settlement demonstrates how advocacy groups are successfully holding corporations accountable for misleading environmental claims.

This case marks the first successful legal challenge against “carbon neutral” greenwashing in Australia. The formal proceedings started on May 14, 2025, in Federal Court and were expected to last two weeks with both sides presenting expert evidence.

The settlement comes amid growing scrutiny of carbon credits, which many Australian companies use to offset their climate footprint. These credits have faced criticism due to lack of global oversight and questions about their effectiveness. This case is particularly significant as clean energy investments are now outpacing fossil fuels at a ratio of 1.7 to 1 globally.

EnergyAustralia, one of Australia’s “big three” energy companies owned by CLP Holdings Ltd., operates coal-fired power plants at Yallourn in Victoria and Mt. Piper in New South Wales. The company has announced plans to install large battery systems at both sites as part of Australia’s shift away from fossil fuels. EnergyAustralia has been identified as the third largest corporate emitter in Australia, highlighting the significance of their misleading carbon neutrality claims.

Australian regulators have been cracking down on misrepresented environmental credentials recently. Companies including Active Super, Mercer Superannuation Australia, and Vanguard Investments Australia have all faced fines for ESG misrepresentation.

The case follows a European Parliament decision to ban similar marketing conduct and represents a significant change in how companies can advertise their environmental impact to consumers.