EU claims rules: what carbon credit buyers can still say

Since 27 September 2026, offset-based product claims are unfair in all circumstances

Until 27 September 2026, a 'climate neutral' product claim backed by retired credits was subject to the case-by-case test for misleading commercial practices in Directive 2005/29/EC. Directive (EU) 2024/825, adopted on 28 February 2024 and published in the Official Journal on 6 March 2024, moved the claim to Annex I point 4c, the list of practices that are unfair in all circumstances.

We read the directive in full on EUR-Lex, together with the European Commission services' Questions and Answers on it, dated September 2026. Five points follow for buyers.

• Offset-based neutrality claims about a product are banned (Annex I point 4c).
• The ban covers wordings beyond 'carbon neutral', including 'climate compensated' and 'reduced climate impact' (Recital 12).
• Offset-based claims about a company as a whole fall outside point 4c, but remain subject to the directive's other provisions (Commission Q&A, question 10).
• The rules cover business-to-consumer marketing only (Article 3(1) of Directive 2005/29/EC).
• Net-zero and other future-performance claims must meet four conditions (Article 6(2)(d) of Directive 2005/29/EC, as amended).

One line of Annex I decides the outcome for offset-based product claims

The amending directive adds a series of points to Annex I of Directive 2005/29/EC. Point 4a covers generic environmental claims, point 4b covers claims about a whole product or business that concern only part of it, and point 4c covers offsetting.

Recital 2 explains that practices listed in Annex I are prohibited in all circumstances, without the case-by-case assessment that applies to other misleading practices. Point 4c contains no exception for the quality of the credits or the method used to account for them.

'Product' means any good or service, so services marketed as neutral through offsets fall inside the ban as well as goods.

The directive names seven claims that fall inside the ban

Recital 12 gives seven examples of claims the ban covers. The list goes beyond 'carbon neutral' and includes claims of partial reduction (Exhibit 1).

One example, 'CO2 neutral certified', shows that certification does not take a claim outside the ban. A certified claim remains an offset-based claim if offsetting is what makes the product neutral, whichever scheme issued the certificate.

Recital 12 also sets the condition under which such wordings can still appear. A claim of neutral, reduced or positive impact is allowed when it rests on the product's actual lifecycle impact, and not on offsetting emissions outside the product's value chain.

Buyers can still report their credit investments and real product reductions

The final sentence of Recital 12 addresses credit buyers directly. It states that the prohibition should not prevent companies from advertising their investments in environmental initiatives, including carbon credit projects, as long as the information is not misleading and complies with Union law. The Commission's Questions and Answers repeat the point (question 10).

The directive and the Commission give examples on both sides of the line, set out in Exhibit 2. Neither the directive nor the Commission's Questions and Answers provides sample wording for describing a carbon credit purchase, so Exhibit 2 shows what the sources allow rather than approved text.

Any statement about credits remains subject to the general test for misleading practices in Articles 5 to 9 of Directive 2005/29/EC. Recital 12 gives two reasons for the ban, that such claims make consumers believe they relate to the product itself or its supply and production, or give the false impression that consuming the product has no environmental impact.

Company-level claims and B2B marketing fall outside the ban; old stock and labels are covered from day one

Company-level claims. Point 4c does not apply to offsetting claims made at company level, but such claims remain subject to other provisions of Directive 2005/29/EC (Commission Q&A, question 10). Claims about a company's future performance, such as a net-zero target, are environmental claims covered by Article 6(2)(d), because the definition of an environmental claim includes claims about a brand or trader.

Business buyers. Directive 2005/29/EC applies to business-to-consumer commercial practices (Article 3(1)). Business-to-business practices fall outside its scope, and Member States may extend its protection to businesses under national law (Commission Q&A, question 1).

Enforcement and penalties. National competent authorities and courts enforce the rules (question 18), and penalties must be effective, proportionate and dissuasive (Article 13(1)). Where penalties are imposed in coordinated cross-border action under Article 21 of Regulation (EU) 2017/2394, the maximum fine must be at least 4 % of the trader's annual turnover in the Member States concerned (Article 13(3)). Where turnover information is not available, the maximum must be at least EUR 2 million (Article 13(4)).

Existing stock. The rules also apply to products and packaging already manufactured, ordered, distributed or on retailers' shelves before 27 September 2026 (question 18). The Commission lists covering or correcting claims with stickers, or adding information at the point of sale, as options, and says authorities may consider whether traders made reasonable and proportionate efforts to comply. For sustainability labels, the Questions and Answers state that the directive provides no transition period beyond the application date (question 8).

The Green Claims proposal. The separate Green Claims Directive proposal (COM(2023) 166) has not been adopted. The European Parliament adopted its first-reading position on 12 March 2024 and the Council adopted its position (general approach) on 17 June 2024. On 20 June 2025 the Commission announced its intention to withdraw the proposal, and the trilogue scheduled for 23 June 2025 was cancelled. The Commission's 2026 work programme, adopted on 21 October 2025, still lists the proposal as pending. Directive (EU) 2024/825 does not depend on it and has applied since 27 September 2026.

Net-zero targets face a four-part test, assessed case by case

Claims about future performance, such as a commitment to reach net zero by a given year, are handled differently from point 4c. They are not on Annex I. Instead, the amended Article 6(2)(d) makes them misleading, after a case-by-case assessment, unless they meet four conditions.

• Clear, objective, publicly available and verifiable commitments.
• A detailed and realistic implementation plan with measurable and time-bound targets.
• The other elements needed to deliver it, such as allocated resources; Recital 4 cites budgetary resources and technological developments.
• Regular verification by an independent third-party expert, whose findings are made available to consumers.

Recital 4 adds that the expert should be independent from the trader, free from conflicts of interest and competent in environmental issues, and should monitor progress against the commitments and milestones regularly. For buyers who use credits inside a net-zero strategy, an advertised target now needs this documentation in place before it reaches a consumer.

Labels and broad claims carry their own conditions

Two further Annex I points affect credit-linked marketing. Point 2a bans displaying a sustainability label that is not based on a certification scheme or established by public authorities. The directive defines a certification scheme by four criteria, including openness to all traders on fair terms and monitoring by a third party independent of both the scheme owner and the trader.

Point 4a bans generic environmental claims unless the trader can demonstrate recognised excellent environmental performance relevant to the claim. Recital 9 lists 'climate friendly' and 'carbon friendly' among its examples of generic claims. A claim stops being generic when its specification appears in clear and prominent terms on the same medium.

Five actions, each with a test you can apply to your own claims

No buyer needs to stop purchasing credits because of this directive. Every buyer selling to EU consumers does need to decide what its products, packaging and campaigns say about those credits.

• Map every product-level climate claim. The test is whether the claim would still be true if the credits had not been bought; if not, it relies on offsetting and falls inside point 4c (see The rule).
• Separate the credit disclosure from the product claim. The test is whether each sentence describes what the company funded or what the product's impact is; only the first can rest on credits (see What buyers can still say).
• Check reduction claims against lifecycle data. The test is whether every tonne in the claim is a reduction in the product's own lifecycle emissions, with no credits counted (see The wordings and What buyers can still say).
• Review company-level claims and targets. The test for a target is whether it has public commitments, a time-bound plan, allocated resources and an independent expert whose findings consumers can see; company-level claims must also comply with the other provisions of Directive 2005/29/EC (see Questions buyers ask next and The four-part test).
• Clear existing stock and labels. The test is whether any pack or label already in the supply chain carries a point 4c claim or a label that is neither based on a certification scheme nor established by public authorities; if so, cover, correct or add point-of-sale information (see Questions buyers ask next and Labels and broad claims).