We’re in the business of transitioning to a new energy future: clean and renewable energy backed by firming capacity. We accept the climate science behind this vision, and – as Australia’s largest emitter of greenhouse gases – it’s a big responsibility.

The more difficult aspect that needs to be addressed is managing the transition in a way that reduces emissions and supports our customers and the community.

We know that many of our customers feel the same way about shaping a more sustainable future. That’s why on 30 June 2020 we 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, we now offer customers the option of carbon neutral certified by Climate Active on all our electricity and gas plans.

How do we offset carbon emissions?

For us to offer electricity and gas products that are carbon neutral certified by Climate Active, we must take action to reduce and remove from the environment the volume of greenhouse gas emissions associated with the energy being supplied to those customers who opt in to Carbon Neutral products.

For an electricity product, this includes emissions associated with the generation, supply and use of electricity at the home or business. For a gas product, this includes the emissions associated with the extraction, production, storage, supply and use of gas.


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.

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.  

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. 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.