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The short answer: On 24 July 2026 the federal government released a consultation paper confirming it will close Climate Active, the scheme that certified voluntary "carbon neutral" claims. Certification is expected to cease on 30 June 2027, and the official "carbon neutral" label will be retired. If your business has relied on that badge, you now need a different way to prove your climate progress: one built on measured emissions and real reduction, not offsets alone.
This is not a step backwards for corporate climate action. The government's own reasoning is that direct emissions reduction and mandatory climate disclosure under ASRS have superseded the need for a voluntary offset-based label. In other words, the bar has moved from buying a claim to reporting your actual numbers, establishing governance frameworks, understanding your exposure to climate related risks and opportunities, implementing strategies to address these and disclosing them annually.
Reporting to ASRS turns a compliance obligation into strategic advantage: it gives your board and investors audit-ready visibility of climate risk, strengthens access to capital and tenders that increasingly demand disclosure, and builds the measured emissions foundation that makes decarbonisation, and credible net zero claims, defensible.
At Trace we have watched this shift coming for years, and we build for the world that replaces it. Here is what is changing, why, and what to do about it.
The Department of Climate Change, Energy, the Environment and Water has opened an eight-week consultation on ending Climate Active, the Australian Government's voluntary certification program. Feedback is open until 18 September 2026, with a final decision expected before the end of the year.
Two options are on the table. The first closes the program entirely with no ongoing government standards or guidance. The second closes certification but retains some high-integrity voluntary standards. Under both options, the certification, the Climate Active trade marks, the official "carbon neutral" term for voluntary claims, and the register of consultants are all discontinued.
The practical timeline matters for planning. Consultation closes 18 September 2026, a decision lands before year end, and certification is expected to cease on 30 June 2027. If your marketing, tenders or annual report lean on a Climate Active certification, you have roughly one reporting cycle to move to something durable.
Three forces pushed this decision. Public trust in the term had fallen, greenwashing litigation was rising, and mandatory reporting had arrived to do the job a voluntary badge once did.
The credibility problem was real. More than 100 participants left the scheme amid concerns it allowed companies to market themselves as "carbon neutral" while continuing to emit, offsetting the difference rather than reducing it. In May 2025, Parents for Climate settled a landmark case against EnergyAustralia, then the largest Climate Active participant, which acknowledged that offsets do not undo the harm caused by burning fossil fuels and apologised to more than 400,000 customers.
The department's position is blunt: strong policy, including mandatory climate reporting and ambitious targets, is now driving corporate decarbonisation and superseding the need for Climate Active. For Australian companies, the message is that a purchased label is no longer the currency. Disclosed, assured numbers are.
If you used Climate Active certification to signal your climate credentials, the ground has moved. A voluntary "carbon neutral" claim backed mainly by offsets is exactly the kind of statement regulators, auditors and customers now scrutinise. Continuing to use retired terminology after the scheme closes carries real greenwashing risk under Australian Consumer Law.
Reporting under the Australian Sustainability Reporting Standards (ASRS), Australia's mandatory climate disclosure regime based on IFRS S2, turns a compliance obligation into strategic advantage: it requires you to disclose climate-related governance, strategy, risk management, and metrics and targets, including Scope 1, 2 and 3 emissions and scenario analysis, which gives your board and investors audit-ready visibility of climate risk, strengthens access to capital and tenders that increasingly demand disclosure, and builds the measured emissions foundation that makes decarbonisation, and credible net zero claims, defensible.
A defensible claim in 2026 is built on measurement first, reduction second, and offsets last, for residual emissions only. It is specific about scope and boundary, it is backed by data you could hand to an auditor, and it describes a direction of travel rather than a single static badge.
This is the gap Trace's Net Zero Certification programme is designed to fill. Rather than a one-off "carbon neutral" stamp, it guides your business through four certified milestones that communicate genuine progress towards net zero: measuring your footprint, committing to reduction, acting on it, and reporting transparently. You can see how the four milestones work on our Net Zero Certifications page. The payoff is a claim that holds up: instead of a badge a regulator or customer can pick apart, you get evidence-backed proof of progress that protects your brand from greenwashing risk and gives buyers, investors and your board a credible reason to trust what you say.
Crucially, the same emissions data that underpins a Trace certification is part of the Metrics and Targets data you need for ASRS disclosure. You measure once and use it for both your public claim and your mandatory reporting, instead of running two disconnected exercises. Trace is a software platform, not a consultancy, so you keep ownership of your numbers rather than renting them from an advisory firm each year.
Trace helps Australian businesses measure emissions to an auditable standard, build a reduction plan, and report under ASRS and ISSB, with progress you can certify and communicate. The platform is rated #1 for Usability on G2 (8.86 versus Workiva's 8.35) and #1 for Results (8.58), and our AI tooling recently reduced one client's climate risk assessment from 13 weeks to 2 weeks.
The closure of Climate Active is a good moment to check whether your climate claims would survive an auditor's questions and a customer's scepticism. If they would not yet, that is fixable, and it is far cheaper to fix now than after a challenge.
Book a free 30-minute call to map your move from Climate Active to defensible ASRS-ready reporting.
Trace is a climate reporting platform specialising in ISSB and AASB standards, helping businesses navigate mandatory climate disclosure with clarity and confidence.
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