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The government has canceled its Climate Active certification scheme after it was labeled as “greenwashing” for big polluters by lobby groups.

It allowed high-polluting companies to record their emissions and claim carbon neutrality by purchasing carbon offsets, which they earned by paying for projects such as planting trees to reduce carbon in the atmosphere.

Climate Active, founded by Opposition Leader Angus Taylor in 2019 (while he was minister for energy and emissions reductions), has allowed companies to source up to 80 per cent of their loans from international projects.

Several major companies have already abandoned the plan, including Telstra, Australia Post and PwC.

The move was welcomed by the Climate Council.

“Climate Active has given the green tick to everything from polluting gas companies to oil in the fuel tank,” said the council’s Ben McLeod.

A spokesman for deputy climate change minister Josh Wilson said the government had reviewed the plan and decided to “proceed with government certification” of pollutants.