Parents for Climate welcomes the Federal Government’s decision to close the Climate Active program and end the risky practice of certifying businesses’ voluntary climate claims as “carbon neutral”. The national parent advocacy organisation has campaigned for over three years through a landmark court case, community advocacy, and an investigation into greenwashing by energy companies.
In a consultation paper released this week, the Department of Climate Change, Energy, the Environment and Water confirmed the government has decided to close Climate Active and cease certifying voluntary “carbon neutral” claims. The paper affirms the arguments for change made by Parents for Climate, pointing to declining public trust in the term “carbon neutral”, rising greenwashing litigation, and a clear shift toward direct emissions reduction.
It marks the end of a federal scheme that, until now, allowed companies to market fossil-fuel products as “carbon neutral” on the strength of carbon offsets. Parents for Climate’s Climate Nonsense report last year found more than one in three of Australia’s major energy retailers at risk of misleading customers with “carbon neutral” and “offset” claims — many of them pointing to Climate Active certification to justify the marketing.
Nic Seton, CEO of Parents for Climate, said:
“This is a win for the millions of parents who are sick of being told that polluting products are somehow ‘carbon neutral’. For three years we’ve argued that government certification was putting an official stamp on greenwashing and today the government has agreed it’s time to end it.
“When we took EnergyAustralia to court, its own acknowledgement made the science plain: offsets do not undo the harm of burning fossil fuels. Climate Active’s biggest participant said it. The evidence said it. And now the government is acting on it. The era of the government-certified greenwashing is over.
“But scrapping a broken scheme is only half the job. Parents want to know which companies are genuinely cutting emissions, not just which ones buy so-called offsets. That’s why the government should keep a high-integrity voluntary standard that rewards real, direct emissions reductions, rather than walking away entirely and leaving families with no trustworthy signal at all.
“We’ll be urging the government to choose that path, and to make sure ‘carbon neutral’ greenwashing doesn’t simply move offshore or behind a new private label. Closing this scheme must be the start of truth in climate advertising, not the end of oversight.”
David Hertzberg, Principal Lawyer at Equity Generation Lawyers, which represented Parents for Climate in its case against EnergyAustralia, added:
“Parents for Climate’s case against EnergyAustralia remains the first and only case in Australia targeting the marketing of consumer products as ‘carbon neutral’. The litigation resulted in a landmark settlement that revealed the fundamental flaw in Climate Active’s ‘carbon neutral’ certification: offsets do not undo the harms of burning fossil fuels.
“The government’s move to end ‘carbon neutral’ certification reflects clear signals from the community, legal and scientific experts, regulators and courts. Companies that have relied on this label should take note. The legal and reputational risks of ‘carbon neutral’ claims based on offsetting are only growing.”
The government’s consultation runs for eight weeks, with a final decision expected before the end of 2026 and a transition period of 12 to 18 months for currently certified businesses. Parents for Climate will make a formal submission supporting the retention of a high-integrity voluntary standard focused on genuine emissions reduction, and calling for stronger regulator action to stop greenwashing during and after the transition.
Seton added: “Parents want the truth, and they want climate solutions that actually protect their kids’ future. This decision shows that when families speak up, governments listen. Now we need to finish the job.”
