By Nick Toscano and Mike Foley
As oil and gas companies talk up their initiatives to shift to less-polluting fuels of the future, the national consumer watchdog wants to draw a line in the sand limiting how far those claims can go.
On Thursday the Australian Competition and Consumer Commission (ACCC) launched a landmark lawsuit alleging millions of Australians were misled by a series of advertisements suggesting the gas that flows into household heaters and stovetops could be “renewable” within a generation.
The ACCC has accused a gas network company of misleading its customers with greenwashing. Credit: Simon Schluter
Gas distribution company Australian Gas Networks ran an advertising campaign called “Love Gas” in 2022 and 2023, featuring a father and his young daughter using gas-powered appliances for cooking, heating and bathing.
The advertisement then fast-forwards in time to show the daughter, now an adult, engaging in the same activities.
“Some things will never change, but the flame we use will,” said the voiceover in the ad. “It’s becoming renewable.”
As the gradual switch to all-electric homes threatens to leave billions of dollars of gas pipeline infrastructure as stranded assets, the promise of cleaner fuels – such as gases made from organic waste or hydrogen – being blended with and one day replacing polluting methane gas used in homes and businesses has become one of the industry’s main survival plans.
But renewable gases are not yet commonly used nor available to residential gas customers. The ACCC alleges Australian Gas Networks’ advertising overstated the likelihood it could overcome “significant technological and economic barriers” within the time frame it suggested.
“It is not currently possible to distribute renewable gas at scale and at an economically viable price, and throughout 2022 and 2023 it was highly uncertain whether, and if so, when, this would be possible,” ACCC chair Gina Cass-Gottlieb said.
The ACCC alleges the advertising amounted to “greenwashing” – the term for misleading consumers by overstating the environmental benefits of products or practices.
“We say these ads were intended to encourage consumers to connect to, or remain connected to, Australian Gas Networks’ distribution network and to purchase gas appliances for their homes, based on the misleading impression they would receive ‘renewable gas’ within a generation,” Cass-Gottlieb said.
An industry source familiar with the development of the company’s advertising campaign said concerns had been raised internally that the technologies being promoted were “very far away from being realised”.
However, in a statement, Australian Gas Networks said it had continually strived to provide accurate communications about its services, and declared it would challenge the ACCC’s legal action.
An image from the advertising campaign called “Love Gas”.Credit: ACCC
“We are disappointed with the ACCC’s decision to take proceedings and will be defending these claims,” a company spokesperson said. “Australian Gas Networks will not be making any further comment at this stage.”
Contraventions of consumer protections carry penalties up to $50 million in each instance, but it is up to the court to determine the fines in each instance.
Gas companies often refer to renewable gases such as green hydrogen – the name for hydrogen made using renewable energy to split water from hydrogen to ensure the end product is emissions-free. They also often cite biomethane, produced when bacteria break down organic material such as landfill or agricultural and human waste.
The pipeline infrastructure run by network companies generates revenue via usage charges, meaning their business models will come under intensifying pressure if there are not enough homes and companies using gas to heat their premises.
A number of pipeline companies across the country have made requests to energy regulators to increase the charges they are permitted to charge, pointing to a reduction in their customer base as homes switch from gas to electric heating and cooking.
Tony Wood, director of energy at the independent Grattan Institute, said switching household gas appliances to electric alternatives was a cheaper way to reduce emissions than using hydrogen or biomethane, which were “too costly and too far off for widespread use in homes and small businesses”.
“I started my life in the gas industry, so I’m not an enemy of the gas industry, but the numbers we did basically suggested biomethane and hydrogen are just bad ideas economically,” he said.
As no Australian green hydrogen project has yet moved into commercial operation, Wood said it was understandable why a gas network operator may want to claim it could deliver greener fuel sources.
“When your only asset is gas networks and there’s an existential threat to your business, then of course you’re going to fight back,” he said.
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