Companies selling in the European Union will no longer be able to claim that their products are carbon or climate neutral, the EU has provisionally agreed. This victory against greenwashing corresponds to longstanding demands from climate campaigners to eliminate the use of offsets and send a signal to the voluntary carbon market.

Following late night negotiations, the European Parliament and the Council of the EU struck a deal to ban advertisements that make “claims based on emissions offsetting schemes that a product has neutral, reduced or positive impact on the environment” (see European Parliament press release here). 

This latest decision concludes negotiations on the Empowering Consumers for the Green Transition (ECGT) directive, which the European Commission published in March 2022, with the intention of updating existing EU consumer protection legislation that was no longer fit for purpose.

Carbon Market Watch and allied organisations have been campaigning intensely for the EU to instate just such a ban. This is because “carbon neutral” advertising misleads and deceives consumers into a false sense of “climate security”, while providing companies with a fig leaf behind which they can conceal their continued pollution by using carbon credits to supposedly offset their emissions. 

We have flagged and called out this damaging greenwashing practice when it has been exploited by major corporations, the FIFA World Cup, by products on supermarket shelves, as well as by fossil fuel companies.

“This agreement is a big step towards more honest commercial practices and more informed European consumers. The European Union is taking leadership in combating greenwashing,” said Lindsay Otis, policy expert on global carbon markets at CMW. “Carbon neutrality claims have been shown to be unintelligible to consumers, and they must stop. Today marks the end of outlandish and baseless advertisements that tell European consumers that they can take carbon-neutral flights, wear carbon-neutral clothes, and eat carbon-neutral food. ”

Ripple effects

The EU’s decision could have ripple effects on the voluntary carbon market, as well as for other EU legislation that is currently in the pipeline, including the upcoming Green Claims Directive and the Carbon Removal Certification Framework (CRCF).

Claiming that products and services have no impact on the climate based on offsetting of emissions ignores the fact that there are large uncertainties in the quantification of both the companies’ own emissions, and the carbon credits that they purchase. Corporations should focus, first and foremost, on rapid and significant emission reductions and supporting climate action outside of their value chains without misleading their consumers about the achieved impact of such investments.

“The EU is sending a powerful signal to the voluntary carbon market: the era of offsetting is over, and carbon credits can’t make up for buyers’ pollution,” said Gilles Dufrasne, policy lead on global carbon markets at CMW. “This is also a message that the EU is sending itself, with a clear precedent for the CRCF (currently being negotiated)  that carbon dioxide removals cannot offset  greenhouse gas emissions and must not be used to advertise products as greener than reality.”