Parent group challenges energy giant over carbon claims

A parent group with more than 20,000 members will challenge one of Australia's largest energy companies in court over claims it misled customers about emissions from its products.

Representatives from EnergyAustralia will appear in the NSW Federal Court on Thursday to defend the lawsuit filed by Parents for Climate following a last-minute hearing delay.

The group claims the company misled more than 400,000 customers using its Go Neutral products, which EnergyAustralia allegedly marketed as "carbon neutral" due to the purchase of offsets, and claimed consumers would have a "positive impact on the environment" by purchasing them.

But Parents for Climate will argue EnergyAustralia's claims were misleading and deceptive, chief executive Nic Seton said, in a lawsuit that will become the first greenwashing case launched against an energy firm in Australia.

"It's one of the most ambitious things that our organisation has ever done," he told AAP.

"It's an Australian first in that no other product has been tested on these grounds of making carbon-neutral claims based on offsets."

The charity, represented by Equity Generation Lawyers, will seek a declaration that EnergyAustralia misled customers about greenhouse gas emissions, a corrective statement to customers, and restrictions on its future marketing.

Australia's rules about environmental claims, including guidance issued by the Australian Competition and Consumer Commission, were not strong enough to prevent greenwashing, Mr Seton said, and the group hoped the lawsuit would encourage reforms.

"If we're successful, this could not just change the behaviour of this particular company but send a really clear signal to all companies in Australia who market their products with these sorts of climate claims," he said.

"Our own analysis of energy companies here in Australia is that this practice is quite common and does need to change."

EnergyAustralia withdrew its Go Neutral products for new customers in November, but a spokesperson for the company said it was committed to offering customers clean energy solutions.

"We have been working closely with Parents for Climate over the last number of months," the spokesperson said.

"We remain optimistic we can resolve this issue together."

EnergyAustralia ranked as Australia's third-highest emitter in 2023-2024, according to statistics from the Clean Energy Regulator, and produced 16.5 million tonnes of carbon emissions.

The company is one of Australia's largest energy retailers, with 1.6 million customers, and operates two coal-fired and four gas-fired power plants across NSW, Victoria and South Australia.

Earlier this year, EnergyAustralia recommitted to closing its Yallourn coal-fired power station in Victoria by 2028 as part of its 2050 net-zero target.