The ACCC alleges that Australian Gas Networks misled consumers by suggesting customers could be using "renewable gas" within a generation.
Renewable gas refers to alternatives, such as hydrogen or biomethane, to the natural gas that is currently piped into millions of Australian homes.
"We allege that Australian Gas Networks engaged in greenwashing in its 'Love Gas' ad campaign," said ACCC Chair Gina Cass-Gottlieb.
"It is not currently possible to distribute renewable gas at scale.
"We say these ads were intended to encourage consumers to connect to, or remain connected to, Australian Gas Networks' distribution network and to purchase gas appliances for their homes, based on the misleading impression they would receive 'renewable gas' within a generation."
According to the CSIRO, Australia is the 14th biggest emitter of greenhouse gases in the world. The processing and burning of natural gas is a major contributor to those emissions. Australian gas also contributes to the emissions of many other countries, with huge quantities shipped overseas.
Australia Institute research shows the proposed expansion of the North West Shelf gas export project in Western Australia would lead to 182 million tonnes of emissions being released into the atmosphere, which is greater than the emissions of all of Australia's coal power stations and greater than the emissions of 153 individual countries.
"The Australian gas industry is one of the biggest polluters in the world," said Richard Denniss, Executive Director of The Australia Institute.
"For any big polluter to promote itself as a leader in the fight against climate change is just plain wrong.
"The Australian government has allowed companies to buy so-called 'carbon offsets' so they can make scientifically baseless claims about being so-called 'carbon neutral'.
"Our research has found that Australians want meaningful action on climate change. Big polluters know this. But rather than meaningful action, they've tried to have their cake and eat it too, by continuing their harmful practices while falsely claiming they are leaders in the fight against climate change.
"It's good to see the ACCC going after this sort of behaviour."
