‘Companies Need to Re-assess the Way They Communicate about Their Purchase of Carbon Credits’: EU Agrees Ban on ‘Climate Neutral’ Claims by 2026

September 22, 2023

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by Oliver Morrison (Food Navigator Europe) The EU has agreed more details about proposals to ban ‘climate neutral’ claims by 2026, which brings implications for the carbon offset market. READ MORE

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Excerpt from BEUC: Consumers will be granted new rights to help them make more sustainable choices following a deal struck yesterday by European legislators on the ‘Empowering Consumers for the Green Transition Directive’. The rules are a major step forward to contribute to Europe’s efforts towards a more circular economy.

The changes, which will take effect in 2026, will better protect consumers against greenwashing, inform them about how durable and repairable products are, and ban unfair business practices leading to short lifespans of products.

BEUC Deputy Director General Ursula Pachl commented:

“Consumers have a crucial role to play in the green transition, so it’s good news they will have more information to make sustainable choices when buying food, new clothes or home appliances. The new EU rules will enable consumers to navigate through a sea of green claims and choose durable products that live up to expectations.

“Generic environmental claims are popping up everywhere, from food to textiles. Consumers end up lost in a jungle of green claims with no clue about which ones are trustworthy. Thankfully, the new rules are putting some order in the green claims’ chaos. Companies will have to explain why a product is environmentally friendly. This is crucial if we are to guide consumers to make more sustainable consumption choices.

“A ban on carbon neutral claims is great news for consumers. There is no such thing as ‘carbon neutral’ or ‘CO2 neutral’ cheese, plastic bottles, flights or bank accounts. Carbon neutral claims are greenwashing, plain and simple. It's a smoke screen giving the impression companies are taking serious action on their climate impact. The truth is that these claims are scientifically incorrect and should never be used. We are delighted to see that the EU has seized this legislative opportunity to ban carbon neutral claims.

“It's important that consumers are informed on how long a washing machine or TV is expected to last. Thanks to the new EU label, consumers from all over Europe will have more clarity on product guarantees. The rules could make more durable products more competitive and incentivise consumers to invest in quality, rather than quantity.”

For consumers, the new law will bring:

Ban on generic environmental claims for which the trader cannot demonstrate an excellent environmental performance.
Ban on sustainability labels which are not based on certification schemes or established by public authorities.
Stricter rules for future environmental performance claims which will only be allowed if they include a realistic implementation plan, feasible targets and if they are regularly reviewed by independent third-party experts, whose findings shall be made available to consumers.
Ban on ‘carbon neutral’ claims, which are highly misleading to consumers and are everywhere on the market, often in the most environmentally-harmful sectors such as aviation and food.
New information obligations on repairability and software updates to help consumers choose more sustainable products at the point of sale.
New harmonised guarantee label to allow consumers to make more informed choices. Consumers will be informed about the durability of products on the market which could influence their purchasing decisions.
Ban on business’ premature obsolescence practices which can cause early product failures.

Next steps

These new rules, once formally adopted, will need to be implemented in EU countries by national governments and will take effect in 2026. READ MORE

Excerpt from EurActiv: In practice, the changes will mean that companies are effectively prohibited from making such claims altogether.

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Frequent fliers may soon notice changes in airlines’ booking interfaces, where suspiciously cheap carbon offsetting offers will no longer be allowed to sell “climate-neutral” flying. After all, carbon offsetting is a practice reviled by activists for the rampant fraud in the industry and its non-permanent nature.

“The EU is sending a powerful signal to the voluntary carbon market: the era of offsetting is over,” said Gilles Dufrasne, policy lead at Carbon Market Watch.

The new law will also firm up rules around environmental claims, which will have to be backed by proof of recognised performance. Widespread product affixes like “Eco” and “natural” will need to be backed by solid evidence.

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“All untrustworthy green claims must be eradicated,” stressed the standards group Ecos, pressing for the EU to make progress on two related laws: the green claim directive and the carbon removal certification framework.

Both laws were proposed in March 2023 and progress has been described as “slow.” READ MORE

Excerpt from European Parliament:

Generic environmental claims and other misleading marketing tricks will be banned
Ban will also apply to commercial communications about goods that contain a design feature introduced to limit product durability
Only sustainability labels based on approved certification schemes or established by public authorities will be allowed
Guarantee information to be more visible and a new guarantee extension label to be introduced

Parliament and Council have reached a provisional agreement on new rules to ban misleading advertisements and provide consumers with better product information.

The agreement updates the existing EU list of banned commercial practices and adds to it several problematic marketing habits related to greenwashing and early obsolescence of goods. The aim of the new rules is to protect consumers from misleading practices and help them make better purchasing choices.

What will be banned?

Negotiators from Parliament and Council agreed to proscribe the following:

generic environmental claims, e.g. “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco”, without proof of recognised excellent environmental performance relevant to the claim;
commercial communications about a good with a feature that limits its durability if information is available on the feature and its effects on the durability;
claims based on emissions offsetting schemes that a product has neutral, reduced or positive impact on the environment;
sustainability labels not based on approved certification schemes or established by public authorities;
durability claims in terms of usage time or intensity under normal conditions, if not proven;
prompting the consumer to replace consumables, such as printer ink cartridges, earlier than strictly necessary;
presenting software updates as necessary even if they only enhance functionality features;
presenting goods as repairable when they are not.

New harmonised label to highlight products with extended guarantee

MEPs successfully insisted on making guarantee information more visible, as many people are not aware that all goods enjoy at least a two-year guarantee in the EU. The Commission is also tasked with designing a new label for producers willing to highlight the quality of their goods by extending the guarantee period free of charge.

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After the deal, Parliament’s rapporteur Biljana Borzan (S&D, HR) said: “We have achieved an excellent deal for consumers. 60% of European consumers are not even aware a legal guarantee comes with all products. That changes today, with a reminder to be present in every shop in the EU and also in some cases on packaging. Also, a new extended guarantee label will show clearly which products last longer, so it will be easier to buy more durable products. We have also negotiated a strong stance on early obsolescence. We shouldn’t advertise products that fail too early. In addition to that, we are clearing the chaos of environmental claims, which will now have to be substantiated, and claims based on emissions offsetting will be banned.”

Next steps

In order to become law, the provisional deal will now have to get the final OK from both the Parliament and the Council. The vote by MEPs is expected to take place in November. When the directive comes into force, member states will have 24 months to incorporate the new rules into their law. READ MORE

Excerpt from The Guardian: On Wednesday (January 17, 2024), members of the European parliament [MEPs] voted to outlaw the use of terms such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco” without evidence, while introducing a total ban on using carbon offsetting schemes to substantiate the claims.

Under the new directive, only sustainability labels using approved certification schemes will be allowed by the bloc. It comes amid widespread concern about the environmental impact of carbon offsetting schemes, which have often been used to justify labelling products “carbon neutral”, or imply that consumers can fly, buy new clothes or eat certain foods without making the climate crisis worse.

“This new legislation puts an end to misleading advertising for supposedly environmentally friendly products and thus enables consumers to make sustainable choices,” said Anna Cavazzini, the Green MEP and chair of the Committee of the Internal Market and Consumer Protection.

“I am particularly pleased that claims such as “climate-neutral” or “climate-positive”, which are based on CO2 offsetting, have been completely banned from the internal market. Investments by companies in climate protection projects are welcome and of course they can still be communicated,” she said. “However, it should no longer appear that planting trees in the rainforest makes the industrial production of a car, the organisation of a soccer World Cup or the production of cosmetics climate neutral. This deception is now a thing of the past. This is a great success for the environment, the climate and consumers.”

The directive comes after months of negotiations over how environmental claims will be regulated in the EU, with a deal reached in September that was approved by law makers on Wednesday. Member states now have two years to introduce the new rules. READ MORE