Australia’s largest natural gas company did not have a “credible and tangible” plan to achieve net zero by 2040, a court has been told, even though it promoted its environmental road map to investors.
A barrister for the Australasian Centre for Corporate Responsibility made the claim against Santos in the Federal Court in Sydney on Friday, summing up a case the advocacy group launched in 2021.
The lawsuit, the world's first to challenge a company’s net-zero emissions plan, alleges Santos misled the public by releasing a strategy that did not accurately account for its future greenhouse gas emissions, carbon capture and storage, or blue hydrogen production.
Santos’ legal team has previously defended the claims, saying its net-zero plans represent targets and “not promises or predictions”.
But the advocacy group's barrister Noel Hutley SC told Justice Brigitte Markovic the net-zero plan was presented to investors with confidence and as a blueprint for emissions reductions.
“This suit is not about the mere announcement of the net-zero by 2040 target - it is about Santos’ representations about the status of its road map and its plan to achieve those targets within the time frame specified,” he said.
“It’s about the description of the target, for example, as a clear and credible road map or a clear pathway to net zero that are based on, quote, real activities.”
Santos’ emissions reduction plan, which was mentioned at an investor day in December 2020 and in its annual report of that year, said the firm would reduce its scope one and two absolute emissions by 26 to 30 per cent in 2030 and achieve net zero in 2040.
But its plan relied upon significant sales of blue hydrogen, which is produced using natural gas, and carbon capture and storage technology that has yet to be established.
The group accepted Santos “was investigating hydrogen as a potential business opportunity”, Mr Hutley said, but disputed that the company could credibly assess future sales.
Santos also failed to detail its carbon capture and storage projects or raise them with the company’s board, he told the court, even though the plan relied on them.
“A reasonable person would not have announced them as real projects based on real activities and would not have called the road map clear, credible and tangible,” Mr Hutley said.
“Frankly, you wouldn’t have called it a plan.”
In October, Santos barrister Neil Young KC argued the company should not have to produce detailed modelling of carbon capture technology, and that its road map merely outlined a target the firm intended to meet.
The non-profit group is not seeking compensation from Santos but a declaration that it engaged in misleading or deceptive conduct, an injunction against similar claims, and a corrective statement about its environmental impact.
Justice Markovic is expected to deliver her judgment in 2025.
