The Federal Court of Australia will deliver a judgment on Tuesday in a case concerning allegations of misleading or deceptive conduct by Santos regarding its public statements on net zero emissions targets and clean energy transition strategy. The case was brought by the Australasian Centre for Corporate Responsibility (ACCR), which announced the action in September 2021, claiming it was the first globally to challenge a company's net zero target and the viability of carbon capture and storage (CCS) and the environmental impacts of blue hydrogen.

Significance of the Ruling

Academics from Monash University state the court's decision is likely to have significant implications for corporate climate transition planning and disclosure, as well as the legal risks associated with net zero and decarbonisation claims. The ruling will also importantly shape the role of strategic climate litigation in corporate accountability and influence the future trajectory of greenwashing litigation in Australia.

Core Issues and Corporate Accountability

As noted by a Monash Business School lecturer, courts are becoming key forums for civil society to test whether corporations responsible for significant greenhouse gas emissions can be held accountable for the credibility of their climate transition claims. The case fundamentally concerns the credibility of corporate climate promises, with courts increasingly scrutinizing whether long-term emissions reduction claims are supported by concrete, near-term action and credible assumptions.

Context: Santos and the Barossa Project

Santos has been a focus for environmental groups, partly due to emissions from its Barossa gas megaproject, which recently shipped its first LNG cargo. The gas in the Barossa reservoirs contains 16% to 20% carbon dioxide, the highest percentage among Australia's producing offshore gas fields. According to Santos's offshore project proposal, the majority of this CO2 is intended to be removed via offshore venting, with the remainder processed onshore at the Darwin LNG facility.

Future Implications

A Monash research fellow added that regardless of the claim's success or failure, the case clarifies the legal boundaries around greenwashing and climate-related representations in Australia. Irrespective of the outcome, continued litigation and regulatory action to address greenwashing are anticipated in the future.