Environmental group sues Santos over net-zero plan

Australian oil firm Santos is being taken to court by an environmental group that disputes that natural gas can be considered a "clean fuel" and that the company had a credible plan for reaching net-zero emissions by 2040.

Santos announced in December last year it would aim to bring down its Scope 1 and 2 emissions to net zero by 2040, envisaging a 26-30% cut in emissions by 2030 versus a 2020 baseline. At the same time it is striving to become Australia's leading natural gas company, viewing the fuel as a key means of displacing coal use and providing baseline power generation to support increased use of renewables.

However the Environmental Defenders Office (EDO), an Australian law centre acting on behalf of the Australasian Centre for Corporate Responsibility (ACCR), said on August 26 that it would argue that Santos' claims about the environmental merits of gas and that its strategy can lead to net-zero emissions by 2040 "constitute misleading or deceptive conduct" under the Corporations Act 2001 and the Australian Consumer Law.

"This is the first court case in the world to challenge the veracity of a company's net-zero emissions target, as well as the first in Australia raising the issue of climate greenwashing against the oil and gas industry," the EDO said. "It is also a landmark, world-first test case in relation to the viability of carbon capture and storage, and the environmental impacts of blue hydrogen, increasingly touted as a key element in gas companies' pathway toward net zero emissions."

Carbon capture and storage and blue hydrogen production play crucial roles in Santos' net-zero plan, but the ACCR called into question the environmental benefit of blue hydrogen. The ACCR also alleges that the company failed to disclose that it intends to increase its greenhouse gas emissions by developing new or existing projects including Barossa, Dorado and Narrabri.

"It would not be appropriate for Santos to comment on matters before the court," the company told NGW.