SA fertiliser company accused of greenwashing, ASIC complaint lodged
ASIC is being asked to investigate whether a rising South Australian fertiliser company operating out of the mothballed Leigh Creek coal mine is misleading investors and consumers by “greenwashing” its impacts on climate change.
A render of NeuRizer's proposed urea processing plant near Leigh Creek.
Lawyers for the state’s peak environment body, Conservation Council SA, have lodged a complaint with ASIC, asking the corporate regulator whether NeuRizer and its planned underground coal gasification facility and fertiliser factory are breaching the Corporations Act 2001 or Australian Consumer Law.
It is particularly concerned about claims by the ASX-listed company, previously known as Leigh Creek Energy, on its website and in its 2022 Climate Related Financial Disclosure Report that the fertiliser it plans to produce will be “carbon neutral”.
NeuRizer is one of South Australia’s fastest-rising companies. In 2022, it jumped 23 places in InDaily’s annual countdown of the state’s top 100 companies – the South Australian Business Index – moving from 67th place to 44th.
Its plan is to convert coal from the old Leigh Creek coal mine into gas to use as a raw material for making the fertilizer urea, meeting a global shortage triggered by the current conflict in Ukraine, one of the world’s largest producers of the concentrated source of nitrogen.
Urea is also a critical ingredient in AdBlue, a non-compulsory diesel fuel additive used to control harmful emissions from trucks.
But the Conservation Council disputes a series of claims made by Neurizer including that “we are Australia’s first carbon neutral producer of urea fertilizer – the building block of crop production around the world”.
Its lawyers, the Environmental Defenders Office, call the representations misleading, arguing the production of “urea fertilizer at the NeuRizer site is not carbon neutral as it is based on fossil fuel hydrogen production from gases related to brown coal reserves”.
“South Australia has a wonderful story to tell as a global leader in the transition to clean, renewable energy,” Conservation Council of South Australia chief executive Craig Wilkins said.
“The last thing we need is a new dirty coal project based on highly risky technology banned in many other states and countries.”
The NeuRizer project has been controversial for several years. In 2020, former South Australian EPA chief Professor Campbell Gemmell raised concerns about the project’s proposed use of unconventional technology – banned in Queensland and Scotland – to extract gas from beneath the ground.
The company was issued a petroleum production licence by the State Government and associated activities license (AAL) in that year for the former Leigh Creek coalfield, so it could develop what it hopes will become the largest underground coal gasification site in Australia.
NeuRizer executive chairman Justyn Peters rejected the Conservation Council’s claims and welcomed an investigation saying the complaint was factually incorrect, misleading and was part of the council’s “ideological opposition to gas, coal and a range of other endeavours”.
“We find the allegation that we are ‘greenwashing’ made by the Environmental Defenders Office on behalf of the Conservation Council of SA, both offensive and factually incorrect,” he said.
The real issue for the Conservation Council and the EDO, according to Peters, is that they have an issue with the “Climate Active Certification” process and the “Climate Related Financial Disclosure Report”, but have chosen instead to “to attack companies who are compliant with the two processes”.
“We have been very clear on these issues in all our statements. The EDO claim the ‘Climate Active certification’ listed on NeuRizer’s website relies on offsets of the company’s office emissions footprint, rather than a reduction in emissions,” Peters said.
“Our ‘Climate Active Certification’ is correct and is satisfied by offsets. We are treated no differently than any other company on this issue.
“We have had both our office and site CO2 emissions independently audited and we have purchased offsets to ensure we are carbon neutral, something we have voluntarily put into place at great expense to the company, especially considering we are not in production of revenue yet.”
Environmental Defenders Office managing lawyer Kirsty Ruddock said ASIC announced last June it was cracking down on greenwashing and last month reported it had intervened in 35 instances.
It has commenced civil proceedings against one company and issued 11 infringement notices. A further 23 representations were withdrawn with corrective public statements, according to an ASIC media release in May.
“We believe the complaint lodged by CCSA aligns closely with the ASIC’s desire to ensure companies adhere to certain standards when making claims about their environmental performance and impact,” Ruddock said.
