The country’s biggest fuel retailer has filed its defence in a groundbreaking High Court challenge to its climate claims. And responding to allegations of greenwashing, Z Energy says there’s equally a problem of ‘greenhushing’.
That is, says chief executive Lindis Jones, when companies that should be trying to make a difference are instead scared into silence by the threat of public opprobrium and legal review.
Consumer NZ, Lawyers for Climate Action NZ and the Environmental Law Initiative have gone to the High Court to accuse Z Energy of greenwashing about its attempts to decarbonise.
The energy company reports the second-highest emissions of any New Zealand company, but says it’s trying to diversify away from petroleum. Its petrol, diesel and jet fuel sales are increasingly supplemented by EV charging and, of course, coffees and muffins.
Its critics aren’t convinced by an advertising campaign it launched in 2022: “We’re in the business of getting out of the petrol business,” the billboards and newspaper advertisements read.
Consumer NZ and the climate law groups claim Z Energy’s fossil fuel sales and carbon emissions are, in fact, increasing. “Regardless of people’s stance on climate issues, all New Zealanders want to know they can trust what they’re told by big businesses,” said Consumer boss Jon Duffy, on filing the action.
Z Energy disputes the alleged increases, saying its operational emissions have decreased every year since 2019. It acknowledges there will be ups and downs, but says it’s working hard to decarbonise over the same 30-year timeframe as New Zealand’s climate goals.
It’s been trial and error. In 2016 it built a first generation biodiesel plant at Wiri, in south Auckland, at a cost of $50m. But in 2022 it decided the plant, which made fuel from sheep and cattle tallow, would never be commercially viable without government investment – so it shut it down.
It’s launched its own residential power retail company, Z Electric (though that’s been criticised for offering fuel rewards to customers). It’s invested more than $60m in power retailer Flick Energy, the Mevo car share company, and home and fleet charging solutions.
And over the past eight years it’s installed public EV chargers at 38 of its 188 Z-branded service stations – a total 107 charging bays. The number of service stations with chargers is still dwarfed by the total 550-plus Z, Caltex and Challenge petrol stations and truck stops that it operates or supplies.
The public chargers have been jointly funded by Z and public money. Z says it’s spent $27.3m on EV charging, in addition to the $4.4m in funding it’s received from the Energy Efficiency and Conservation Authority.
A ploy named sue
Iwi Chairs Forum climate co-leader Mike Smith, of Ngāpuhi and Ngāti Kahu, is already suing Z and other big emitters for the harm that climate change causes to New Zealanders. He’s awaiting a Supreme Court ruling to decide whether it is allowed to proceed.
And late on Thursday, Z Energy filed its response to the High Court action taken by Consumer NZ and environmental law groups who accuse the fuel retailer of greenwashing.
The claimants had pointed to Z’s promise to get out of the petrol business, in which the company said it would look very different in 2030 and 2050 from how it looks today.
According to regulated disclosures to the Environmental Protection Authority, Z Energy is second on the list of big New Zealand emitters, after Fonterra. Z is closely followed by Mobil and BP.
Both Fonterra and Z have worked to calculate and disclose all their emissions – not just scope 1 and 2 emissions, but also some scope 3 supply chain emissions. And in Z’s court filings this week, it questions whether other companies are as conscientious in reporting their scope 3 emissions.
Talking to me as Z filed its court defence, chief executive Lindis Jones cautions against demonising companies that disclose the extent of their emissions.
He says that transparency, in identifying the scale of the problem, is an important step towards addressing the problem.
He argues the hundreds of court cases against corporates, all around the world, are penalising those firms and governments that are most open about their emissions and their work to cut them. That deters other big emitters from stepping up and speaking out.
He calls it greenhushing.
“I think that’s one of the real stories here. I’ve been with this company for 13 years, and we have been extremely deliberate and proud of our reporting, our openness and transparency, and also our ambition.
“The predictable outcome here could be that companies like Z say less, do less and are less ambitious. That’s the last thing New Zealand needs.”
Dustbin liners and bananas
According to a report from the London School of Economics Grantham Research Institute on Climate Change and the Environment, there have been 2341 climate cases filed with the courts around the world. More than half of the decided claims have been successful.
The report says more cases are being filed against corporates, including 81 ‘climate-washing’ cases challenging the accuracy of green claims and commitments.
These include complaints against mining company Glencore for expanding coal production despite net zero commitments, a case against Volkswagen for inconsistency between climate pledges and corporate lobbying, allegations of failure to disclose climate risks by banks, and challenges to ‘carbon-neutral’ claims of everything from dustbin liners to bananas.
The London report says the increase in climate-washing court challenges may be attributable to the increasing sophistication of litigation strategies and the identification of new pressure points within corporate value chains, particularly regarding the provision of finance for high-emitting activities.
“The growth in climate-washing cases reflects broader concerns with corporate accountability for
climate pledges along with ongoing debates about the role of companies in climate decision-making.”
The Consumer NZ action against Z Energy is the first such climate-washing case in New Zealand.
From forecourts to High Court
Until Z Energy was bought by Australian fuel retail giant Ampol, its leadership had been dubious about the place of fast public chargers on forecourts. But Ampol has invested heavily, with Australian government support, in public charging – and now its New Zealand subsidiary is doing the same.
Lindis Jones says that strategic change has been influenced by watching on-the-go charging take off in Europe, and the benefits of scale in a bigger corporate group.
There’s “a viable business case” for moving to different types of electricity retail, including chargers on forecourts. It’s about giving consumers what they want, he says.
“What we know from overseas is what customers do when they’re charging EVs is slightly different to what they do when they’re refuelling an internal combustion engine. There will be other things they look for, like food to take home to cook, or more extensive grocery shopping. Absolutely.
“We believe that there’s an opportunity to expand what we offer when customers are charging their EV, because it’s time that they can use productively.”
But giving customers what they want also means continuing to pump petrol and diesel for the foreseeable future. That’s acknowledged by Jones, and it’s a concern expressed by the court claimants.
About 10 years from now, the company forecasts the demand for petrol and diesel will have declined by 30 to 50 percent.
So is Z Energy “getting out of the petrol business” as its advertising claims? “The first thing I would say is that the choices in front of us, our customers and society more broadly, are complex, they’re uncertain, and it’s going to take time.
“So in terms of getting out of the fuel business, that will happen over time. But no one’s ever going to thank me as the CEO of this organisation, New Zealand’s largest importer of fuel, for not providing a supply of fuel that’s safe and reliable now.”
Pressed by Newsroom, Jones won’t put a date on when the company will exit petroleum for good.
“There’s so much uncertainty about what 2050 might look like, including what energy is needed to keep New Zealanders moving,” he says.
“I’d much rather be judged as a chief executive on what Z’s done and is doing now, than spending time speculating on how the next 30 years might play out.”
A 2021 inhouse report by Z Energy says liquid fuels, including biofuel and other low-carbon fuels, will be required for some time yet.
“It may be 2060 or later before long-haul aviation finds a viable sustainable fuel base,” the report says. “Essentially, our tanks and terminals have a long economic life yet.”
Jones says the forecourt retail side of Z’s business is the most visible, but the other half of its supply – to airlines, farmers, ambulances and the like – requires more complex technological solutions.
For instance, airlines say the prospect of battery-electric long-haul air travel looks slim in the foreseeable future; instead they’re looking at either hydrogen planes or fuels made out of biological feedstocks like forestry waste.
Z Energy is working with LanzaJet and Air New Zealand to find out whether this country can produce a biological-based sustainable air fuel. Jones acknowledges the move away from jet fuel will take longer than electrifying the light transport fleet.
Corrective advertising sought
Consumer NZ and the environmental law groups want the High Court to rule that Z Energy breached the Fair Trading Act in its claims to be decarbonising, and order it to publish corrective advertising.
Jessica Palairet, executive director of Lawyers for Climate Action, says the group supports companies taking meaningful steps to reducing their emissions, and welcomes more transparency by major companies on their emissions and emission reduction targets.
“But the problem we’re addressing in this case is where companies use public messaging to appear more climate friendly than is really the case,” she says. “It’s important to hold major emitting companies to account for the statements they make to the public.”
Consumer NZ has been asked for comment, but is still digesting the statement of defence.
