It’s not just ASIC that has turned its focus to greenwashing in recent history. As part of an existing greenwashing sting, the ACCC has taken its latest scalp in the race to keep ESG claims honest.
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This time, Australian Gas Networks (AGN) has graced the wrong kind of regulatory spotlight on the consumer watchdog’s stage.
But it’s perhaps the thrust of the ACCC’s argument that may make other companies, listed or private, take note.
In short, the ACCC says nobody in the country is able to supply renewable gas at scale. That’s for either industrial or household customers.
Not only that, but the watchdog says it isn’t going to happen for decades to come.
Strong claims from the watchdog
In short, AGN is getting sued because of a digital campaign it ran across 2022 and 2023, wherein it’s been accused of misleading customers by saying it could provide renewable gas to households within “a generation.”
“We allege that the ads overstated the likelihood of Australian Gas Networks overcoming significant technical and economic barriers to distribute renewable gas to households within a generation,” ACCC chief Gina Cass-Gottlieb said.
“We allege that even though Australian Gas Networks knew the future of renewable gas was uncertain, it made an unqualified representation to consumers.
“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.”
The ACCC ultimately argues that AGN lied to consumers about their green credentials in a bid to encourage customers to sign up with AGN to supply gas to their homes, and or, to persuade existing customers not to make a switch.
This, the regulator argues, is the same as lying, as far as the guidance it issued back in 2023 goes.
Implications troubling for others
In my view, it isn’t just that the ACCC has accused AGN of greenwashing here that’s noteworthy, but more so the legal defence it’s taking to court – that nobody can port renewable gas to households, affordably, within the next “generation.”
Let’s just assume that’s 40 years. That brings up interesting implications for Australia’s overall 2030 and 2050 “net zero” targets, which do perhaps feel like they become less relevant every year.
It could end up as a headache for Canberra.
That is because the government recently moved to identify hydrogen and biomethane as “natural gas equivalents,” which then allows select companies to offer carbon offset certificates called “Renewable Gas Guarantee of Origin” (RGGO) certificates.
Delorean Corporation was one company that covered those regulatory changes just yesterday. But now we have the ACCC saying no company can possibly hope to send renewable gas to household consumers within the next generation.
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Presumably, that includes hydrogen and biomethane. While biomethane is expensive to make, hydrogen faces a larger issue – it embrittles the types of pipelines that cover the earth to handle natural gas, ultimately meaning breakdowns happen sooner, and the end of life for each pipeline is brought forward.
This is likely to be the kind of thing industry doesn’t want to deal with, and for hydrogen at least, adds to the ACCC’s legal defence.
One to watch. Especially if this gives ASX Compliance any ideas.
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