The EU is set to introduce a new ‘Green Claims’ Directive, setting a high bar and harmonising the approach to green claims across the EU. 

In the latest development, on Wednesday 17 January, the EU confirmed its aggressive approach towards green claims that rely on offsetting.

Based on extensive research, including by The Guardian, it has been found that an alarming number of forest carbon offsetting schemes, including those relied upon my many big corporations as part of their sustainability commitments, were not worth the recycled paper they were written on.

There has been concern over these schemes for some time, and we have seen many cases and decisions by regulators across the EU and UK that have gone against advertisers who create the impression that choosing their product or service means the environment won't be adversely impacted, including in the aviation and fossil fuel industries, but also in the fast moving consumer goods (FMCG) and other sectors.  Many of those claims rely on offsetting, at least in part.

Under the new directive, only sustainability labels using approved certification schemes will be allowed within the EU, and anyone claiming their products or services are “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco” will be required to provide proof that those claims are true and not misleading. However, in a significant step, the EU has confirmed that carbon offsetting schemes cannot be relied upon to justify or support those claims. 

It was agreed that “To ensure the fairness and credibility of such claims, Article 6(2) of Directive 2005/29/EC should be amended to prohibit such claims, following a case-by-case assessment, when they are not supported by clear, objective, publicly available and verifiable commitments and targets given by the trader and are not set out in a detailed and realistic implementation plan that shows how these commitments and targets will be achieved and allocates resources to this end. The implementation plan should include all the relevant elements necessary to fulfil the commitments, such as budgetary resources and technological developments, where appropriate and in accordance with Union law. Such claims should also be verified by a third party expert, who should be independent from the trader, free from any conflicts of interest, with experience and competence in environmental issues and who should be enabled to monitor regularly the progress of the trader with regard to the commitments and targets, including the milestones for achieving them. Traders should make those regular findings of the third party expert available to consumers.”

"It is particularly important to prohibit claims, based on greenhouse gas emissions offsetting, that a product, either a good or service, has a neutral, reduced, or positive impact on the environment in terms of greenhouse gas emissions. Such claims should be prohibited under all circumstances and therefore added to Annex I to Directive 2005/29/EC as they mislead consumers by making them believe that such claims relate to the product itself, or the supply and production of that product, or as they give the false impression to consumers that the consumption of that product has no environmental impact, while this is not the case

“Examples of such claims are ‘climate neutral’, ‘CO2 neutral certified’, ‘carbon positive’, ‘climate net zero’, ‘climate compensated’, ‘reduced climate impact’, ‘limited CO2 footprint’ among others. Such claims can only be allowed when they are based on the actual lifecycle impacts of the product in question, and not based on greenhouse gas emissions offsetting outside the product’s value chain, as the former and the latter are not equivalent. This should not prevent companies from advertising their investments in environmental initiatives, including carbon credit projects, as long as they provide such information in a way that is not misleading and also complies with the requirements laid down in Union legislation.”

Member States have a two years to introduce the new rules (and a further 6 months to start applying them).