Insights EU Green Claims Directive: European Parliament Committees adopt position

In March 2023, the European Commission published a proposed Directive on the substantiation and communication of explicit environmental claims (“Green Claims Directive”) to address what it sees as the proliferation of misleading or unfounded claims, “greenwashing,” which may arise by the use of terms such as “eco-friendly,” “carbon neutral” or “recycled.” This complements existing advertising law and the changes the Commission proposes to make to the EU Consumer Rights and Unfair Commercial Practices Directives to improve the protection of consumers against unfair commercial practices relating to greenwashing and early product obsolescence (proposal for a Directive on empowering consumers for the green transition). That proposal, which is currently also passing through the EU legislative process (previously reported by Wiggin), does not explicitly address environmental claims.

The proposed Directive provides that, before making an “explicit environmental claim,” the trader must undertake an assessment in order to be able to substantiate the claim by reference to several criteria including any existing scientific evidence. An “explicit environmental claim” is, broadly, a voluntary business-to-consumer commercial communication, not required by law, in text form or contained in an environmental label, which states or implies that a product or trader has a positive or no impact on the environment. The assessment must be made publicly available in hard copy or by means of a weblink or QR code (or equivalent) and kept up to date. The substantiation for all such claims must be verified, before being made public, by an independent accredited conformity assessment body that will issue a certificate of conformity. There are extra rules for substantiating comparative environmental claims.

The proposed Directive also sets out specific requirements for environmental labelling schemes, schemes which certify that a product, a process or trader complies with the requirements for the label. Existing schemes may continue but, to control their proliferation, new public environmental labelling schemes will not be allowed unless developed at EU level. Any new private schemes will have to be approved.

Enterprises with fewer than 10 employees and with an annual turnover and/or balance sheet total not exceeding €2m are excepted from the substantiation and communication requirements. Businesses based outside the EU who make explicit environmental claims directed at EU consumers will fall within the scope of the new law. Complaints of breaches can be made to the national competent authorities and the proposal envisages collective actions as well. Traders can face fines of up to 4% of turnover for breach. Measures under the Directive will apply 24 months from its entry into force.

The two European Parliament Committees responsible for this proposal, IMCO and ENVI, adopted their position on the draft Directive on 14 February 2024. The text is not yet available. According to reports, they propose that the verification would take place within 30 days and that certain less complex claims and products should benefit from faster or simpler verification. As for claims relating to carbon offsets, by which businesses offset their emissions by measures such as tree-planting which absorb CO2, the Committees suggest, amongst other things, that these can only be mentioned if the business has already reduced their emissions substantially and the scheme is used for residual emissions only.

The Committees’ position will be put to a vote in a plenary meeting of the Parliament currently scheduled for 11 March 2024. The Council of the EU also needs to adopt its position. Final agreement on the Directive is not expected until after the Parliament elections in June.

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