Tools for journalists reporting on corporate climate action.

Net zero was initially intended to push countries and non-state actors to reduce their emissions close to zero, with any remaining emissions counterbalanced by projects that remove carbon from the atmosphere. The end goal was genuine decarbonisation at the speed and scale needed to align with the Paris Agreement.

While net zero emerged from physical climate science, it was never really suitable to be adopted by nation states – let alone corporations. The elevation of net zero to something that is ubiquitously viewed as the norm for corporate climate action was driven largely by the fossil fuel sector, because they saw an opportunity in the word ‘net’ to create a loophole rather than genuinely reducing emissions.

This has created a situation where countries and corporations are offsetting emissions rather than rapidly reducing them. Corporations claiming to be on a path to net zero are increasingly relying on carbon credits to ‘balance out’ emissions rather than making the necessary operational changes to reduce them.

Carbon credits are widely used to offset or compensate for emissions for burning fossil fuels. But scientific evidence is clear that one tonne of carbon emitted is not the same as one tonne of carbon avoided through an offset program. It’s a false equivalence. Offsets are being used by corporations as a delay mechanism, not a reduction strategy.

Climate Integrity’s assessment of 10 of Australia’s biggest corporations net-zero pledges (AGL, BlueScope Steel, Cleanaway, Coles, Origin Energy, Qantas, Rio Tinto, South32, Telstra & Woolworths) found half the companies are using voluntary credits to count towards their emissions reduction targets, in place of making real emissions cuts.

‘Real zero’ (also known as true zero) is exactly what it sounds like: Science-based decarbonisation that actually phases out fossil fuel use without overreliance on false climate solutions like offsetting, techno-optimism or carbon capture and storage.

Limited adherence to science is leading to meaningless net zero pledges and over-reliance on carbon removals. Meanwhile, fossil fuel interests and proponents of net zero use obfuscation and debates around offsetting and removals as a delay mechanism. Real zero is a genuine attempt to cut through the spin.

Carbon removal is a scarce resource, which should be managed fairly and equitably, but there is currently no framework to ensure that. While Carbon removals play a crucial role in the transition to net zero, carbon removal into land is limited by sustainability constraints that are frequently ignored in the current Australian policy landscape.

For Australia to meet its climate goals the government needs to establish a framework for the sustainable and ethical use of carbon dioxide removals. Without robust oversight, Australia’s largest emitters are free to continue using offsets as a means to claim they are on track with towards their net-zero targets, without doing the work to reduce their emissions.

A sustainable national carbon removals budget would allocate removals fairly to the most deserving uses – rather than the highest bidders willing to buy large amounts of carbon credits.

Implementing a carbon removals framework will align Australia with emerging global trends, where major trading partners are setting the bar high through regulation like the EU’s Carbon Border Adjustment Mechanism.

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For Australia to meaningfully contribute to science-aligned climate action, then all government reforms, policies and business guidance must be raising the bar on what business is required to do to ensure real progress towards global emission reduction goals.

Immediate Government action is needed including:

1. Science aligned, mandatory transition plans for business

2. Consistent rules for companies' pledges and transition plans to reach real zero

3. Clear and transparent disclosure requirements

4. Enforceable standards for just transition planning

5. Strong and well resourced regulators