Self-styled shareholder advocacy organisation, the Australasian Centre for Corporate Responsibility (ACCR) has launched legal action against Santos in the Federal Court of Australia, challenging the Australian operator’s claims that natural gas provides clean energy and that it has a “credible and clear plan” to achieve “net zero” emissions by 2040.
“It is the first court case in the world to challenge the veracity of a company’s net zero emissions target for being misleading, and a world-first test case in relation to the viability of carbon capture and storage (CCS) and the environmental impacts of blue hydrogen,” said ACCR director of climate and environment, Dan Gocher.
Upstream approached Santos for comment on the court action, but the company has not yet responded.

Acting on behalf of the ACCR, lawyers from the non-governmental legal centre Environmental Defenders Office (EDO) claim that Santos is engaging in misleading or deceptive conduct in potential contravention of both corporate and consumer law.
Some specific concerns being raised include Santos’ statements that the natural gas it produces is a “clean fuel” and provides “clean energy”.
The ACCR claims these statements convey that the extraction of fossil gas and the end use of that gas do not have a material adverse effect on the environment.
The ACCR alleges that Santos' 2020 annual report failed to disclose that extraction and processing of fossil gas involves the release of significant quantities of carbon dioxide (CO2) and methane into the atmosphere and that the end-use of natural gas releases “material amounts” of CO2.
In this report, Santos stated it had a “clear and credible” plan to achieve “net zero” scope 1 and 2 greenhouse gas emissions by 2040. A large amount of this reduction is anticipated to come from future CCS processes and blue hydrogen.
The ACCR counters that these statements are potentially misleading given the operator has firm plans to increase its greenhouse gas emissions through the expansion of its natural gas operations and has not yet decided how to proceed with its net zero plans.
CCS credibility questioned
In particular, the lawsuit alleges that Santos’ net zero plans depend upon “a range of undisclosed qualifications and assumptions about CCS processes”.
In light of this, the EDO, acting on behalf of ACCR, late last month commenced proceedings in Australia’s Federal Court seeking to resolve the issues in dispute.
“More than 80% of Santos’ net zero plan relies on CCS. The promise of CCS technology has been used by the fossil fuel sector to justify business as usual for decades,” Gocher said.
He alleged Santos’ ‘clean energy’ and ‘net zero’ claims pose a major risk to investors as it becomes increasingly difficult to differentiate between companies taking genuine action versus those relying largely on offsets or unproven technologies.
Gorgon cited
Santos is mulling a final investment decision on its Moomba CCS project with a proposal to apply carbon credits to injected CO2, to offset emissions from Barossa and Darwin LNG.
“Santos has provided no detail on the completeness and permanence of CO2 capture at Moomba, along with how it will manage long-term leakage risk,” Gocher added.
He cited the Chevron-operated Gorgon CCS to support the claim that the technology is expensive and unreliable.
Gocher also questioned the efficacy of Santos' plans to use injected CO2 for enhanced oil recovery (EOR) in the Cooper Basin, alleging high CO2 leakage rates.
Role of EOR must be disclosed
Elaine Johnson, EDO director of legal strategy, said the court action is intended to ensure that Santos and other gas companies are held to account for the claims they make about their product and its future in a highly carbon-constrained global economy.
“Given the seriousness of the risks of continued fossil fuel use, gas companies must be completely transparent about their future planning. Plans should be robust, detailed and open to scrutiny. Instead, we see ‘net zero’ plans that contain very little detail and which are often contingent for their success on unproven processes, such as carbon capture and storage,” she said.
The ACCR alleged that by making the above representations, Santos has engaged in conduct that was misleading, or likely to mislead, in contravention of Australia’s Corporations Act 2001 and Australian Consumer Law.