The closure of the government’s Climate Active certification scheme announced last week has been met with both celebrations and mourning from different industry players.
The scheme encouraged voluntary climate action from organisations and companies by granting its Climate Active certification to carbon neutral companies that demonstrated work had been done to measure and reduce their carbon emissions and had purchased carbon offsets for what’s left.
The scheme has been used by more than 500 companies but has been described by critics as “state sponsored greenwashing”. Companies using the scheme include Coles, NAB, Commonwealth Bank, Energy Australia, Origin, Ampol, Qantas, Goodman Group and Telstra.
The government said there was now “less need for government certification to incentivise voluntary climate action”, especially with the rollout of its mandatory climate related disclosure requirements. It also said there are maturing and more widely adopted international guidance frameworks, and consumers, investors and the public are demanding direct emission reductions.
Notably, Energy Australia has admitted that carbon credits were not an effective means of offsetting fossil fuel emissions during its greenwashing lawsuit initiated by Parents for Climate Action in May last year.
Climate Council was quick to denounce the scheme, saying there was “no mourning” for the scheme, as scrapping the scheme meant coal and gas giants can no longer call themselves “carbon neutral”.
“With Climate Active headed to the scrap heap, it’s time for the Albanese government to strengthen the Safeguard Mechanism and end the free ride for Australia’s biggest polluters.”
The organisation said more than 100 companies have withdrawn from the scheme in recent years, “amid growing acknowledgement that offsetting is not a genuine solution to climate change”.
Steve Ford, in an article written for The Fifth Estate, wondered why the program needed to be closed when the scheme could just evolve to have a stricter and more immediate performance outcome model, and offer more meaningful carbon credits.
Ford said the pivot to penalise corporate citizens for utilising voluntary offsets to claim carbon neutrality, then mandate the nation’s largest industrial emitters use those same offset structures to meet compliance targets through its flagship Safeguard Mechanism, is hypocrisy.
“Given that nearly 200 million Australian Carbon Credit Units (ACCUs) have been created and only 2.6 million voluntarily retired in Climate Active claims, surely the mandated Safeguard Mechanism where most ACCUs are used should face similar scrutiny,” Ford writes.
Evan Stamatiou, director at Carbon Risk Management, told The Fifth Estate that while “it’s a shame” the program is closing, “it’s not surprising”.
“It’s a shame because there are some high-impact certifications out there that sit head and shoulders above any criticism thrown at the program. It’s unsurprising, though, because the federal Coalition undermined the program’s potential over a number of years to suit its short-term political objectives, and that came back to bite the program.”
What comes next: feedback sought
According to the Climate Active website, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) is seeking feedback on two options for the program: to close it entirely or to close it but retain some voluntary standards and guidance. It said it will no longer review or monitor any claims made about Climate Active or Carbon Neutral certification once the changes come into effect, and the brand will discontinue its trademarks, register of consultants and its website.
Stamatiou said, “I don’t think there’s any point in retaining voluntary standards if you don’t have someone to administer the program, or if the government isn’t going to explicitly back the carbon neutral logo. It will all just fizzle out, which is obviously a shame for those organisations that leveraged the program to genuinely do the right thing by their customers and the environment.”
Meanwhile, Nicole Joffe, the sustainability and governance lead at PTI Capability, said “getting a decision on Climate Active is a positive”, considering most decisions in the climate space take years.
“That said, the reasons put forward to close as opposed to recalibrate don’t quite stack up. Organisations looking to voluntarily support emission reductions would benefit from a considered and transparent standard, and in a contested space, a common reference point for all stakeholders adds real value.
Joffe has worked across a number of government roles, including supporting the establishment of the Climate Change Authority, as a senior policy officer for carbon pricing, markets and energy division for the federal DCCEEW and was a director for energy policy for the Australian Competition and Consumer Commission (ACCC).
In an article he wrote for Michael West Media, David McEwen asks what this “silent recognition” that carbon offsets no longer credibly underpin climate claims means for the Safeguard Mechanism.
With the government now amid a statutory review of the scheme, he wonders if that would mean the government would consider phasing down unlimited Australian Carbon Credit Unit (ACCU) use, and if not, “is its position still defensible?”
He said Australia is now an outlier, when internationally, compliance schemes are moving away from offsets.
“The EU Emission Tracing Scheme prohibits them entirely, as does the UK. California limits them to 6 per cent of obligations.”
“Either way, the retirement of Climate Active marks the beginning of a much larger conversation. The era of unquestioned offsetting is over. The question now is whether the Safeguard Mechanism will evolve with it.”
A retrospective
Evan Stamatiou offered a retrospective into the scheme which started as the National Carbon Offset Standard in 2010.
“When the Coalition government repealed the CPM in 2014, they were desperate to have something positive to say on climate. Their influence at the time ensured that program design rules remained lax beyond the 2015 review, and at the same time they went about applying back-door pressure on corporates to sign up to the program. This contributed to a wave of new certifications that conveniently gave the Coalition something to say on climate to fill the void after the CPM repeal.
“For many organisations, Climate Active (then NCOS) gave them a positive customer engagement story and for some of the larger corporations, somewhere to allocate the unwanted international offsets that they’d previously purchased in anticipation of CPM compliance.
“It was win-win for all.
“Eventually, the increasing scrutiny around greenwashing exposed the flaws in the program, especially around lax offset quality standards and not enough emphasis on direct decarbonisation. Attempts were made to raise the bar to weed out low-quality certifications, but it was too late because these things have long tails with poor practices from the last decade still creating negative press today.”
