EU agrees to ban offset-based carbon-neutral product claims

EU Parliament and Council reached a provisional agreement to ban product claims of neutral, reduced, or positive environmental impact based on emissions offsetting schemes, alongside generic green claims. The crackdown on greenwashing sets a precedent Indian exporters and brands should track as offset-based marketing faces tightening scrutiny worldwide.

EU Parliament and Council reached a provisional agreement to ban misleading advertisements and improve product information, revising the EU catalogue of prohibited commercial practices. The deal bans generic environmental claims such as "environmentally friendly", "natural", "biodegradable", "climate neutral", or "eco" without proof, claims based on emissions offsetting schemes that a product has neutral, reduced, or positive environmental impact, and sustainability labels not based on approved certification schemes or established by public authorities, targeting greenwashing and premature obsolescence.

The rules affect manufacturers and advertisers making environmental, durability, and repairability claims, plus those prompting early replacement of consumables like printer ink cartridges or presenting software updates as necessary when they only add features. The Commission will create a new harmonised label for manufacturers extending guarantees at no extra cost, since 60% of European consumers are unaware all EU products carry a minimum two-year guarantee. Durability and repairability claims must be substantiated, and unsupported obsolescence-related marketing will be prohibited.

To become law, the agreement must be approved by Parliament and Council, with the MEPs' vote scheduled for November, after which member states have two years to transpose the directive. Companies should prepare to substantiate environmental claims and abandon offset-based neutrality marketing. Brands and exporters can monitor the legislative timeline and ensure sustainability labels rely on approved certification schemes, as the directive clears what the rapporteur called the "chaos of environmental claims" across the EU single market.

Key figure — Consumer awareness gap: 60% unaware products carry a two-year legal guarantee