Sunday, July 21, 2024

The EU Green Claims Directive

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In March 2023, the European Commission adopted a proposal for the Green Claims Directive. The proposal proposes minimum requirements for substantiating, communicating, and verifying explicit environmental claims. An important feature of the proposal is that certain green claims need to be verified upfront by independent third parties (the principle of ex ante verification). On 17 June 2024, the European Council (made up of representatives from all EU Member States) adopted its position (‘general approach’) on the directive. The Council’s general approach will form the basis for negotiations with the European Parliament on the final shape of the directive. These negotiations are expected to begin in the new legislative cycle later this year. 

One of the changes of the Council is the proposed introduction of a simplified exemption procedure, limiting scope of application of third-party verification. Certain explicit environmental claims of a less complex nature may be exempted from third-party verification if the company completes certain ‘technical documentation’ before the claim is made public. Another change relates to claims such as ‘carbon neutral’ or ‘net zero’, where carbon credits are used to offset emissions. Whereas the Commission’s proposal required companies to specify whether offset claims relate to emission reductions or removals, the Council’s position does not distinguish different types of offset claims as long as they are used to balance out an emissions share of a product to net zero. Generally, it is important to note that, while carbon offset claims are becoming more controversial (see, for example, the finding that offset claims were misleading in the recent judgment Fossielvrij/KLM), the Green Claims Directive would continue to allow climate-related claims involving carbon credits if adequately substantiated.

Our team is closely monitoring the developments and will keep you informed on the next steps. In the meantime, please feel free to reach out to us with any questions or to discuss what this directive can mean for your organisation.

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