Having underpinned corporate climate claims since 2010, the program will be phased out in stages, with all operations expected to cease by 30 June 2027.
For Australian organisations that have built their sustainability programs around this badge, this announcement marks a significant structural pivot. However, this policy shift should not signal a halt to corporate environmental ambition. Instead, it offers a timely commercial opportunity to upgrade your procurement strategy, align with high-integrity international frameworks, and continue driving impactful voluntary climate action.
The era of the federal "carbon neutral" trademark is drawing to a close following the Government’s announcement to sunset Climate Active by 30 June 2027. While mandatory mechanisms cover large entities, this policy shift leaves a distinct structural gap for smaller and mid-sized organisations seeking a recognised voluntary framework to guide their emissions reduction and compensation efforts.
Yet, the closure of a domestic certification program should not mean the end of credible voluntary climate action for companies in Australia. Carbon credits remain an essential strategic mechanism to fund global mitigation, scale up carbon removal technologies, and take direct financial responsibility for unavoidable emissions on the path to net zero, whilst supporting local innovations, communities, and climate action.
The closure of Climate Active in Australia matches a global trend: the end of “carbon neutral”. Following growing scrutiny, the era of voluntary, high-level green claims is coming to an end, replaced by regulated claims, evolving disclosures, and verifiable climate action. This trend is accelerating due to direct legal scrutiny and mandatory requirements for transparent claims.
Rather than acting as a setback, the end of Climate Active offers companies in Australia purchasing carbon credits the opportunity to align with international best practices. Global standards, especially the newly released SBTi Corporate Net-Zero Standard (CNZS) V2.0, are fundamentally shifting from simple target-setting to implementation accountability. Central to this update is the Ongoing Emissions Responsibility (OER) framework included in the SBTi CNZS V2.0, which establishes a tiered recognition model and clear rules for funding external climate action. This framework allows companies to credibly finance verified mitigation outcomes beyond their value chain.
Climate Active's offset eligibility criteria lagged behind recent international quality standards. This transition is a direct commercial opportunity to future-proof your strategy by procuring high-integrity credits from emerging global benchmarks, including projects holding the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCP) label or those with favorable independent third-party ratings.
Simultaneously, continuing your voluntary credit purchasing ensures that vital domestic progress does not stall. Projects under the ACCU Scheme support Indigenous groups and biodiversity outcomes, and many of these projects rely on voluntary contributions from the private sector to fund efforts.
Corporate leaders should not pause their climate programs. South Pole recommends taking four immediate actions to seamlessly navigate this changing landscape:
Review all public marketing, product packaging, and corporate sustainability documentation to identify where Climate Active labels or "carbon neutral" terminology are currently used. This will establish a clear decommissioning plan.
Make sure to align your carbon credit purchases with your net zero strategy and wider business goals. Taking responsibility for ongoing emissions through voluntary contributions is a critical ‘bridge’ that allows your company to demonstrate leadership and fund climate action right now. This is achieved by purchasing carbon credits from a wide variety of projects and technologies which, at this stage, do not necessarily need to be closely linked to your specific industry or operations.
At the same time, preparing for neutralisation requirements is critical to confidently achieving net zero. This involves securing access to high-permanence removals to balance out the final ~10% of unavoidable residual emissions, ideally by selecting projects and technologies that are closely linked to your industry and operations. Leading organisations increasingly choose a blended portfolio that ensures they are making a maximum climate contribution now, through diverse voluntary actions, while proactively securing the long-lived removal supply needed to reach their net zero targets in the future with confidence.
Ideally, your carbon credit purchasing strategy should align with one or more of these frameworks: SBTi, VCMI Claims Code, Oxford Principles, or ISO. SBTi (particularly under the CNZS V2) emphasises taking responsibility for ongoing emissions as you transition to net zero. The VCMI Claims Code provides a leading benchmark for high-integrity claims, ensuring that your use of credits is transparent and credible. The Oxford Principles provide a science-based pathway for evolving your portfolio, advocating for a progressive shift from emission reductions toward carbon removals with long-lived, durable storage to ensure residual emissions are counterbalanced permanently.
However, as global guidance frameworks are still evolving, it is important to establish your own robust internal goals. A partner like South Pole can help you interpret these complex guidelines and guide you on how to adapt them to your specific business and climate strategy.
Our team can help you navigate carbon market complexities, access and procure high-quality credits aligned with best practice, and interpret global standards. Together, we can design a tailored corporate climate strategy and provide recommendations where carbon credits could support your objectives. Our 2026 Carbon Market Buyer’s Guide includes a comprehensive Carbon Credits Procurement Checklist to help your organisation get started.
Finally, communicate your impact. Be transparent about your climate action journey, your long-term targets, and the carbon projects that you voluntarily continue to support to cover emissions you are responsible for today.
Transitioning away from Climate Active represents a strategic milestone rather than a regulatory setback. While navigating the decommissioning of old “carbon neutral” claims requires careful planning, it also opens up an opportunity to align with the most renowned and recognised frameworks and standards worldwide.
Over the years, South Pole has guided global leaders through similar regulatory changes in other parts of the world like the UK and European Union, building climate strategies aligned with international standards. Connect with us to future-proof your climate journey today.
Ready to align your carbon credit purchases with international best practice? Contact South Pole’s Australian team today to schedule your tailored transition assessment.
