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What it means to offset carbon

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AGL Energy
16 June 2021

We believe that Australia’s energy future will be affordable and smart – delivered from renewable sources that are backed by flexible energy storage technologies which come together to power our homes, businesses and vehicles.

This future will be low emissions based, and at AGL, we accept the climate science behind this vision. We also understand that Australia has the knowledge and technologies to achieve this in a way that continues to Shape tomorrow and create new industries and opportunities for the future.

Many of our customers feel the same way about shaping a more sustainable future.

We’ve seen growing expectations for action on climate change, which according to Australia Scan’s Cultural Trends Report 2021 was the top priority people wanted governments to address in 2020, above the cost of living and the economy. Furthermore, our research shows that 80% of customers are now actively conscious about the environment, and more than a third are now ‘strongly green’.

We’re in the business of transitioning to a new energy future, which is why on 30 June 2020 AGL announced our new Climate Statement. This includes a commitment to offer customers the option of carbon neutral prices across all our products by June 2021.

In line with this commitment, from 16 June 2021 carbon neutral options are available on all AGL products. This includes gas, electricity, mobile, internet, business energy solutions, solar and battery products certified by Climate Active.

How do we offset carbon emissions?

For us to offer carbon neutral products, we must take action to reduce and remove from the environment the volume of greenhouse gas emissions associated with the essential services we supply to our customers.

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Carbon offsets… and carbon offsets

Not all carbon offset units are created equal. There’s a wide range of carbon offsets that differ in source, methodology, and price. We undertake a rigorous selection process when it comes to the carbon offsets we purchase. The eligible carbon offsets we buy meet the Carbon Neutral Standard integrity requirements set by Climate Active.

There are many different offset methodologies. Some include reforestation, renewable energy, or energy efficiency projects that generate eligible carbon offsets; projects that involve the destruction of certain industrial gases; and projects that involve the capture and destruction of methane from landfills and certain agricultural activities.

Many of these projects also provide additional positive environmental and social benefits.

“We know that balancing quality and affordability is important to our customers, so we only purchase eligible carbon offsets that meet the integrity requirements under the Climate Active Carbon Neutral Standard, which is backed by the Australian Government.”

Carbon offsets we've pre-purchased

We believe that the projects we’ve chosen will make a real difference. Initially, our pre-purchase obligations have been secured with certificates for the following projects:  

  • Westmere Regeneration Project in NSW: this native forest regeneration program generates Australian Carbon Credit Units and supports our local graziers.  
  • BURN Stove project in Kenya: each cook stove produced for Kenyan families cuts 1.4 tonnes of greenhouse gases each year – the equivalent to a flight from London to New York.
  • Carbon Conscious project in WA: helps provide a protective habitat for native flora and fauna and reduces wind and water erosion.
  • Ceramic Water Purifiers Project, Cambodia:  expected to provide access to adequate levels of clean drinking water to an estimated 1.7 million people across 312,000 households over seven years.  

 

Different types of carbon offsets


GSVERs: Gold Standard Verified Emission Reductions are carbon credits created from projects that adhere to high levels of environmental integrity and deliver sustainable development benefits to local communities as set and determined by the Gold Standard. Established in 2003 by WWF and other international NGOs, Gold Standard is considered a rigorous climate standard.

ACCUs: Australian Carbon Credit Units are carbon credits that are generated under the Carbon Farming Initiative (CFI) and meet stringent measurement methodologies to ensure they are eligible. The majority are issued in agriculture and include forestry, vegetation, savanna burning, and landfill gas. Projects must be Australian, and the offsets are issued by the Clean Energy Regulator in Australia.

CERs: Certified Emission Reductions are a type of offset issued under the Clean Development Mechanism. There is a broad range of credits and methodologies available under the Clean Development Mechanism that apply to projects across the world.

In line with the Climate Active standard, AGL does not invest in pre-2012 CERs, long-term CERs, temporary CERs, CERs involving the destruction of certain gases, CERs from nuclear projects, and CERs from large-scale hydro projects inconsistent with the EU criteria. We also don’t invest in palm oil projects or projects that are the drivers of deforestation, where the destruction of habitats could occur.

VCUs: Verified Carbon Units are issued under the Verified Carbon Standard (VCS) program administered by Verra. VCS is the world’s largest voluntary greenhouse gas program. VCUs are characterised by a number of quality assurance principles which ensure all VCUs represent greenhouse gas emission reductions or removals that are real, measurable additional, permanent, independently verified, conservatively estimated, uniquely numbered, and transparently listed.



While there is a wide range of carbon offsets available to purchase to be carbon neutral, ranging in quality and price, we recognise that our customers want a quality product at an affordable price. For lower emission products, like mobile and internet, we have automatically included carbon neutral at no extra cost.

To ensure quality, we only purchase eligible carbon offsets in Australia and overseas that meet the integrity requirements under the Climate Active Carbon Neutral Standard, which is backed by the Australian Government.

For more information, please visit the AGL website.