Climate Active critics welcome Telstra withdrawal, call for overhaul of carbon offsets

Critics of the Climate Active scheme believe Telstra’s withdrawal could prompt others to follow suit, and ultimately spark an overhaul of carbon offset schemes.

Telstra announced on Friday that it is withdrawing from the government’s Climate Active carbon neutral labelling program. Picture: AFP

Critics of the federal government’s Climate Active carbon neutral labelling program believe Telstra’s withdrawal could prompt other participants to follow suit, and ultimately spark an overhaul that addresses doubts about the credibility of carbon offset schemes.

Telstra on Friday announced it was walking away from the program, and claims of carbon neutrality and carbon offsetting, in favour of direct action to reduce its emissions.

The move followed widespread criticism of the program, which was lambasted in a Senate inquiry in April, with claims it was being used to “greenwash” large companies by allowing them to claim carbon neutrality, despite the Australian Competition and Consumer Commission refusing to endorse the program’s claims.

Andrew Macintosh, an environmental law professor at Australian National University and a former head of a carbon credit integrity assurance body, has been a vocal critic of Climate Active, previously describing it as a “sham” and a fraud on taxpayers and the environment. Professor Macintosh said he hoped Telstra’s move would trigger other companies into finding more effective ways to decarbonise.

“We deal with quite a few players in the voluntary market that are looking to have credible decarbonisation plans and they come across exactly the same issues that we know exist in the carbon market,” he said.

“Why would you engage in the market in a big way as a voluntary player where the market is dominated by low-integrity credits?

“It’s very hard for people without expertise to identify high-quality projects, and then you’re at risk of being criticised for buying low-quality credits, even if you do so with good intent.

“I’m very sympathetic with the (Telstra) decision.

“It’s a position that I’m seeing other corporates considering – just basically turning their back on it or looking elsewhere, because the state of the market’s not where it needs to be in terms of integrity.

“In fact, it’s miles away from where it needs to be.”

Former ACCC chairman Allan Fels has been a vocal critic of the Climate Active program. Picture: NewsWire

The Climate Active label is being used by about 700 companies, products, buildings and events, including Ampol, Coles, NAB, Commonwealth Bank, Energy Australia, Origin, Qantas, Goodman Group and Telstra.

Participants pay an annual licence fee for the right to call themselves carbon neutral with the government’s backing.

Telstra, which claimed carbon neutrality in 2020 via the purchase of carbon credits to offset its emissions, has said its move was not related to any concerns around the government program or the credibility of carbon credits generally. However, a Senate inquiry into greenwashing heard in April that the ACCC had not yet signed off on the Climate Active program because of confusion around its rules.

Former ACCC boss Allan Fels told the inquiry last year that the certification program could be guilty of “misleading and deceptive conduct”, and worried whether enough was being done to make sure all certificates represented genuine action on climate change.

He wants to see “much stronger vetting” of carbon offset projects as part of the certification regimen.

“There’s been a history of making very dubious Climate Active certifications, e.g. only relating to part of a business, so the head office, ignoring what’s happening in the field – there are well justified public concerns about some of the Climate Active claims not being fully substantiable,” he told The Australian on Friday. “In principle, I prefer direct action to carbon offsets, providing there’s an at least equivalent climate effect.”

There are several categories of offsets permissible under the Climate Active scheme, dominated by Australian Carbon Credit Units issued by the Clean Energy Regulator, and Certified Emissions Reductions issued in line with the rules of the Kyoto Protocol.

Professor Andrew Macintosh.

Professor Macintosh said there were major shortcomings with both. “The problem is that a lot of the CERs are rubbish, and then a lot of the ACCUs are rubbish as well,” he said. “I would personally like to see, domestically, a competitor scheme set up against the ACCU scheme because there’s a large number of these corporates and others trying to do decarbonisation plans in the absence of a scheme with integrity.

“Because the ACCU scheme is so closely tied to safeguard mechanism, the politics just means it’s just not going to get out of the quagmire that it’s in.”

Under the federal government’s Safeguard Mechanism, the country’s largest polluters must keep emissions below set baselines, and can do so by buying and surrendering ACCUs or earning ACCUs by running their own abatement projects.

Last year, the government announced a review of the Climate Active certification, with proposed updates including removing the term “carbon neutral” and implementing stricter reporting requirements.

A spokesman for the Department of Climate Change, Energy, the Environment and Water said: “Climate Active was established in 2010 to help businesses measure, reduce, offset and publicly report their emissions. Climate science, community expectations, international benchmarks and business practices have evolved significantly since then.

“In 2023 the Australian government sought feedback on reforms that would require more climate ambition from businesses seeking to be certified under the program. Under these proposals, a refreshed Climate Active will ask businesses and organisations to prioritise direct emissions reductions, in line with community expectations.

“The government is working through feedback on these proposals and will announce a refreshed program this year.”

Originally published as Climate Active critics welcome Telstra withdrawal, call for overhaul of carbon offsets