When Northern Territory Businesses Need Advice on Net-Zero and Carbon Claims

Net-zero and carbon-neutral advertising can create legal risk. Learn how Northern Territory businesses can substantiate, explain and review emissions claims.

Businesses in the Northern Territory increasingly promote products, services and operations as net-zero, carbon-neutral, low-emissions or better for the climate. Those statements can influence purchasing decisions, investment and public reputation. They can also create legal risk if an ordinary consumer would take away an impression that the business cannot substantiate. [S1]

The central rule is straightforward: emissions claims made to consumers must be truthful, accurate and supported by complete, reputable and clear accounting. [S1] The same practical approach applies whether the claim appears on a website, product packaging, social media, point-of-sale material, tender document directed at consumers or general advertising. [S1]

Why Northern Territory businesses should take care

The Australian Consumer Law applies nationally, including in the Northern Territory. It prohibits businesses from engaging in misleading or deceptive conduct and from making false or misleading representations in trade or commerce. The ACCC’s emissions guidance is designed to help businesses communicate environmental credentials without misleading consumers. [S1]

A claim does not avoid scrutiny merely because it is expressed as marketing language. Words such as “green”, “clean”, “sustainable”, “carbon neutral” and “net-zero” may communicate specific factual impressions, depending on the context. The relevant question is what an ordinary consumer is likely to understand from the overall advertisement, not what the business intended to say in a technical document. [S1]

For a business operating in Darwin, Alice Springs, a remote community or across multiple jurisdictions, the same issue arises: the claim must accurately describe the activity, product, service or business to which it relates. A claim about one facility should not appear to describe the entire enterprise unless that is genuinely the case.

What evidence should support an emissions claim?

Define the claim before making it

Start by writing down precisely what the business intends to communicate. “We are reducing emissions” differs from “this product has 30% fewer emissions than our previous product” and from “our operations are net-zero.” Each statement requires different evidence and may involve different emissions boundaries.

The supporting assessment should identify the relevant greenhouse gases, activities, time period, baseline and comparison. Accounting should include all significant emissions sources relevant to the claim, and the business should clearly explain significant sources that have been left out. [S2]

A credible calculation should be relevant, complete, consistent, transparent and as accurate as reasonably possible. Businesses should retain the methods, data sources, assumptions and calculations used, particularly where figures may later need to be explained to a regulator, customer or commercial partner. [S2]

Avoid selective or vague information

A business may create a misleading impression by highlighting a small emissions improvement while omitting a larger source connected with the same product or service. The ACCC cautions against highly selective, broad or non-specific claims. [S3]

For example, advertising electricity generated from renewable sources may not establish that the entire product or business is emissions-free. Relevant issues could include transport, manufacturing, refrigeration, waste, purchased goods, fuel use and other activities within the chosen boundary. Whether an omission is material depends on the claim and the consumer impression it creates.

Technical detail does not need to overwhelm an advertisement. However, material qualifications should be easy to find and understandable to people without specialist knowledge. A QR code or linked methodology can provide additional information, but it should not be used to contradict or silently qualify a prominent headline claim. [S2]

Carbon-neutral and net-zero claims

Carbon-neutral claims commonly involve measuring emissions and then using reductions, removals or purchased credits to address remaining emissions. If credits are part of the claim, the advertising should make that clear rather than suggesting that the business has eliminated its emissions through its own operations. [S3]

The business should identify the relevant crediting scheme and provide information about the project, timing, registry and whether credits were purchased and surrendered. It should also consider integrity issues such as additionality, permanence and double counting, as well as potential social, environmental and governance risks associated with the project. [S4]

“Net-zero” can likewise be misunderstood if the business does not explain what is covered, what has actually happened and what depends on future action or credits. A claim about a particular product, site, event or reporting period should not be presented as a claim about the company as a whole unless the evidence supports that broader message.

Businesses should also ensure that the same emissions reduction is not counted more than once, including where a reduction is attributed both to the business and to another party or credit purchaser. [S3]

Future targets and net-zero commitments

Statements such as “net-zero by 2030” or “we will cut emissions by half” are representations about the future. The ACCC says businesses must have reasonable grounds for future claims. [S1]

That generally calls for more than a slogan or aspiration. A business should be able to explain its current emissions position, the measures it has committed to, the funding and resources available, the assumptions behind the target, interim milestones and the people responsible for delivery. The ACCC recommends documenting the processes, assumptions and decision-makers involved in setting targets and updating that material as circumstances change. [S5]

Marketing should distinguish clearly between what is happening now, what has been committed, what is planned and what may happen later. [S5] A future target should not be phrased as if it has already been achieved.

When should a business obtain legal advice?

Legal and specialist advice is particularly useful where:

  • the claim uses absolute or prominent language such as “zero emissions” or “100% sustainable”;
  • the claim covers a complex supply chain or multiple sites;
  • the business relies on offsets, removals or purchased credits;
  • emissions boundaries, baselines or methodologies have changed;
  • a target depends on uncertain technology, finance or regulatory settings;
  • the claim is central to a tender, major campaign, product launch or investor communication; or
  • the business has received a complaint, regulator enquiry or challenge from a competitor.

A sensible review combines consumer-law advice with technical emissions expertise. Counsel can test the headline wording, disclosures, evidence, approval process and records. The technical adviser can review data, boundaries, calculations and credit quality. Those functions should work together rather than treating legal review as a final check after the marketing has already been designed.

A practical pre-publication checklist

Before publishing an emissions claim, ask:

1. What exactly would an ordinary consumer understand the claim to mean?

2. Does the evidence support that overall impression, not merely a narrow technical proposition?

3. What entities, products, locations, emissions sources and time periods are included?

4. Are material exclusions, assumptions and limitations explained clearly?

5. Is the claim about present performance, a commitment or a future possibility?

6. If credits are used, does the claim disclose that fact and identify the relevant project or scheme?

7. Has the business checked for double counting and assessed credit integrity?

8. Are the calculations, data sources, approvals and supporting records retained?

For Northern Territory businesses, accurate environmental marketing is not only a compliance exercise. Clear evidence and careful wording help consumers compare products fairly, protect the business from reputational damage and make genuine emissions-reduction efforts easier to understand. [S1]

Sources

  1. ACCC, “Making emissions claims to consumers.” — accc.gov.au
  2. ACCC, “Making emissions claims to consumers,” Prompt 1: Evidence and accounting. — accc.gov.au
  3. ACCC, “Emissions claims and the ACCC’s role.” — accc.gov.au
  4. ACCC, “Prompt 3: Credits.” — accc.gov.au
  5. ACCC, “Prompt 6: Future claims.” — accc.gov.au

Frequently asked questions

Does the Australian Consumer Law apply to a Northern Territory business making climate claims?
Yes. The Australian Consumer Law operates nationally, and businesses making emissions claims to consumers must avoid misleading or false representations. The claim should be assessed by considering the overall impression likely to be formed by an ordinary consumer. [S1]
Can a business call itself carbon-neutral if it buys carbon credits?
Potentially, but the claim should clearly explain that it relies on purchasing and surrendering credits. The business should provide transparent information about the projects, scheme, registry, timing and safeguards against double counting. [S4]
What is the difference between an emissions-reduction claim and a net-zero claim?
An emissions-reduction claim usually describes a decrease against a defined baseline, while a net-zero claim may communicate that remaining emissions are balanced by removals or credits. Both require clear boundaries, reliable accounting and wording that matches the evidence.
Are future net-zero targets legally risky?
They can be. Businesses need reasonable grounds for future claims and should document the plans, funding, assumptions, milestones and actions supporting the target. Advertising should separate current achievements from future commitments. [S5]
Is a disclaimer enough to cure a broad emissions claim?
Not necessarily. A qualification may not correct a prominent or misleading overall impression, particularly if it is difficult to find, highly technical or inconsistent with the headline claim. Material limitations should be clear and prominent.