Consumer NZ is taking legal action against Z Energy, seeking declarations that the company has breached the Fair Trading Act with misleading public messaging.
The consumer group is challenging claims which it argues create an impression the fuel company is making bold changes to significantly reduce emissions and is urgently mitigating its contribution to the climate crisis.
In a statement, Z Energy said it took the claim made against it extremely seriously and was working to consider its response.
The consumer group is taking legal action along with the Environmental Law Initiative and Lawyers for Climate Action New Zealand.
It disputed Z Energy's advertising featured slogans including, "we're in the business of getting out of the petrol business", and Z is "well on track to achieving [its] carbon reduction targets".
Consumer argued that in reality Z Energy's fossil-fuel sales and carbon emissions were increasing.
"We really question whether they can substantiate that because their core business is selling petrol," Consumer NZ chief executive Jon Duffy told Morning Report.
Z Energy was is the second largest greenhouse gas emitter in New Zealand and was accountable for more than 10 percent of the country's emissions, Consumer NZ said.
On claims that it had built a biofuel plant and was rapidly expanding its electric vehicle (EV) charging network, Consumer said Z Energy's biofuel plant stopped operating in 2020 and shut down in 2022, and EV chargers have only been installed in a "small percentage of Z's outlets".
"We want the courts to consider whether Z Energy's messaging to the public has been misleading. We believe, even though its stated intent may be to 'get out of the petrol business', so far, its actions do not live up to that intent." Consumer NZ chief executive Jon Duffy said.