Greenpeace launched legal action against Woodside Energy in 2023 in the Federal Court, alleging it misled or deceived Australians about its climate performance and plans.
The case was dismissed by the court on Wednesday by consent of both parties, court documents show.
Greenpeace declared the outcome a victory, saying Woodside changed how it presented its plan for carbon emissions and how it responded to climate change after the case was launched.
"We take that as a win and have decided to continue the fight against fossil fuel corporations outside of the courts," said Joe Rafalowicz, Greenpeace Australia Pacific's head of climate and energy.
"Greenpeace strongly supports public interest litigation as a crucial tool in democratic engagement to protect our planet and holding large corporations accountable for their contributions to climate change."
Woodside said it welcomed the case being dismissed but declined to comment further.
"The proceedings, in which GAP challenged certain representations made by Woodside in relation to its climate strategy and emissions reduction targets, were dismissed by consent of both parties, who will bear their own costs," the company said in a statement.
Greenpeace's legal case claimed Woodside stated that it cut down on pollution produced from extracting and processing its gas and oil by 11 per cent in 2022.
But it leaned heavily on carbon offsets, and its actual emissions went up by more than 3 per cent, the organisation claimed.
The gas giant also publicly had a plan to be "net zero" by 2050, but didn't spell out that the target didn't apply to the emissions produced when its oil and gas were burnt, Greenpeace said
The conservation group said Woodside's statements were designed to make investors, governments and the general public believe it was reducing its emissions, but they were actually increasing.
Santos was cleared of greenwashing in February, when a case brought by the advocacy organisation Australasian Centre for Corporate Responsibility in 2021 failed.
It challenged claims by Santos that natural gas provided "clean energy" and that the company had a "credible and clear plan" to achieve net-zero greenhouse gas emissions by 2040.
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