Telstra becomes carbon neutral, but forced to buy most carbon offsets in India

Australia’s largest telecommunications company has become officially certified as carbon neutral, but has been forced to buy carbon offsets from overseas, particularly in India, because of a lack of opportunities to invest in local carbon abatement projects.

Telstra undertook a range of measures to reduce its emissions footprint on the way to achieving its carbon neutral certification, including the purchase of zero emissions electricity under a deal with the Murra Warra wind farm in Victoria and the Emerald solar park in Queensland, which accounted for around one-fifth of the company’s total electricity consumption.

Telstra also made modest investments in improving the energy efficiency of some of the company’s operational sites, through upgrades to HVAC equipment and improvement to building energy efficiency.

However, Telstra opted to offset the remainder of its carbon footprint through the purchase of offset permits, and said in its statement substantiating its status as carbon neutral, that it was forced to purchase almost all them from renewable energy projects in India.

Of the remaining 2.33 million tonnes of Telstra’s emissions footprint leftover to be offset just 11,000 tonnes, or 0.47 per cent, was offset using emissions reductions purchased from Australian based projects.

Telstra purchased 10,000 tonnes of abatement from the Southern Aurukun Savanna Burning project in Cape York, and an additional 1,000 tonnes from the Yarra Yarra biodiversity project in Western Australia.

But lamenting a lack of Australian carbon offset projects, Telstra purchased the bulk of its carbon offsets from solar and wind projects based in India.

More than 99 per cent of Telstra’s emissions offsets were sourced from the Rising Sun solar project, the ReNew Solar energy project or the Tadas Wind Energy Project, all located in India, and produced offsets that are significantly cheaper than those generated by projects in Australia.

“Our experience has been that it is extremely difficult to purchase carbon offsets from projects located in Australia. This is something that needs to be addressed because what it says is that there are not enough projects contributing to a reduction in greenhouse emissions,” Telstra CEO Andy Penn said.

It is a claim that puts into question the Morrison government’s strategy of relying heavily on companies undertaking voluntary action to reduce their emissions to meet Australia’s emissions reduction targets.

But this approach may see companies follow Telstra’s experience and purchase offsets from other countries, instead of cutting emissions locally.

Federal energy and emissions reduction minister Angus Taylor told a Clean Energy Council forum on Tuesday that his preferred approach was to see companies act voluntarily.

In addition to becoming carbon neutral, Telstra has committed to purchasing 100 per cent of its electricity from renewable sources by 2025 and reducing its absolute carbon footprint by 50 per cent by 2030.

Electricity consumption contributed just over half of Telstra’s emissions in 2019, followed by embedded emissions in goods and equipment purchased by the company, as well as emissions associated by premises leased overseas.

“Climate change is a perfect example of where business should take meaningful action because the business sector is a major contributor to greenhouse emissions,” Penn added.

“Big business as a key contributor to the economy, as a major employer, and as a major user of resources has a responsibility to make contributions to the betterment of society. This period of COVID has provided a chance to experience our world as a quieter environment and under clearer skies. If ever there was encouragement for bolder and more significant action on climate it is now.”