Carbon Neutral Claims Banned in the EU: What Changed in 2026 and Why

"Carbon neutral" was the marketing world's favourite environmental claim for nearly a decade. Thousands of products across Europe carried the label — from bottled water to airline tickets to financial services. All it took was buying carbon credits from a broker and sticking the claim on your packaging.

That era ended when Directive 2024/825/EU became enforceable. The ECGT directive doesn't technically ban the words "carbon neutral" — but it creates conditions that make the claim virtually impossible to use legally without fundamental changes to how most companies substantiate it.

What Exactly Is Prohibited

Article 6(2)(c) of the amended Unfair Commercial Practices Directive now prohibits environmental claims "based on greenhouse gas emissions offsets" that suggest the product or trader has a neutral, reduced, or positive environmental impact. The prohibition targets the specific practice of purchasing carbon credits to offset emissions without demonstrating actual emissions reductions.

In practical terms, this means:

Prohibited: "Carbon neutral product" where neutrality is achieved entirely through purchased offsets
Prohibited: "Climate positive company" backed by offset credits exceeding the company's footprint
Prohibited: "Net zero by 2030" roadmaps that rely primarily on future offset purchases
Still allowed: "We reduced Scope 1 and 2 emissions by 40% since 2020, measured per ISO 14064"
Still allowed: "This product's carbon footprint is 2.3 kg CO₂e per unit, verified by [accredited body]"
Grey area: "Carbon neutral" where offsets supplement a demonstrated 70%+ emissions reduction pathway

Why the EU Took This Step

The regulatory rationale is straightforward: the voluntary carbon market hasn't delivered the environmental integrity that carbon neutrality claims imply.

A 2023 investigation by The Guardian, Die Zeit, and SourceMaterial found that over 90% of rainforest offset credits certified by Verra — the world's largest carbon credit standard — were likely "phantom credits" that did not represent genuine carbon reductions. The Berkeley Carbon Trading Project estimated that only 12% of analysed offset projects delivered their claimed climate benefits.

When a company buys credits from projects that don't actually reduce emissions, their "carbon neutral" claim isn't just misleading — it actively undermines climate action by giving consumers a false sense of environmental progress.

France led the way. Article L541-9-1 of the French Environment Code banned "carbon neutral" claims on products from January 1, 2023 — three years before the EU-wide prohibition. The French approach proved enforceable and became the template for the ECGT.

The Offset Quality Problem

Not all carbon offsets are created equal, and the EU's position reflects a growing consensus that the market's quality controls have been inadequate. Three core problems plague the current offset market:

Additionality

For an offset to be legitimate, the emissions reduction it represents must not have happened anyway. A forest that was never at risk of being cut down doesn't generate real offsets when "protected." Studies by Trove Research found that 30-40% of forest protection projects certified by major standards had questionable additionality.

Permanence

Forest-based carbon credits assume the carbon stays stored for 100+ years. But forests burn, get logged, or die from drought and disease. When California's wildfires destroyed forests that had been sold as carbon offsets, the stored carbon was released back into the atmosphere — rendering those credits worthless retroactively.

Double Counting

Under the Paris Agreement, host countries count emissions reductions toward their own Nationally Determined Contributions (NDCs). If a company also claims those same reductions through offset credits, the reduction is counted twice. Article 6 of the Paris Agreement requires "corresponding adjustments" to prevent this, but implementation remains inconsistent.

How to Reformulate Your Claims

If your business currently makes carbon neutrality claims, here's a practical framework for transitioning to compliant language:

Step 1: Measure and Report Actual Emissions

Replace vague neutrality claims with specific emissions data. "Our Scope 1 and 2 emissions were 12,400 tonnes CO₂e in 2025, independently verified by SGS" is legally defensible. "Carbon neutral" is not.

Step 2: Document Reduction Progress

"We reduced absolute emissions by 35% between 2020 and 2025" — with verifiable baseline and current data — communicates genuine environmental effort without triggering the offset prohibition.

Step 3: If Using Offsets, Disclose Separately

You can still purchase carbon credits. You can even communicate this. But separate the reduction claim from the offset activity. "In addition to our 35% emissions reduction, we invest in certified reforestation projects" is transparent and compliant. "Carbon neutral through offsets" is not.

Step 4: Set Science-Based Targets

The Science Based Targets initiative (SBTi) provides a framework that regulators recognise as credible. A validated science-based target communicates ambition without the legal risk of a neutrality claim.

What About Existing Certifications?

Several certification bodies — including ClimatePartner, South Pole, and Carbon Trust — have offered "carbon neutral" certification programmes. These certifications do not automatically make a claim ECGT-compliant.

The directive evaluates the claim as presented to the consumer, not the certification process behind it. A product labelled "carbon neutral — certified by ClimatePartner" still makes a carbon neutrality claim, and if that neutrality is achieved primarily through offsets, it falls under the prohibition.

ClimatePartner itself acknowledged this shift, rebranding from "carbon neutral" to "ClimatePartner certified" in late 2023 — a move that presaged the regulatory direction.

Sector-Specific Implications

Aviation

Airlines offering "carbon neutral flights" through offset programmes must restructure their messaging. CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) provides an industry-specific framework, but CORSIA compliance doesn't satisfy the ECGT's consumer-facing requirements.

Food and Beverage

"Carbon neutral" product labels on food items — common for brands like Evian (Danone) and Nespresso (Nestlé) — must be removed or reformulated. The Product Environmental Footprint Category Rules (PEFCRs) for food and drink provide a compliant alternative methodology.

Financial Services

ESG funds marketed as "carbon neutral portfolios" face dual scrutiny under the ECGT and the Sustainable Finance Disclosure Regulation (SFDR). Fund managers must distinguish between the portfolio's financed emissions and any offset strategies used.

E-commerce

"Carbon neutral delivery" claims — offered by Shopify, Etsy, and numerous logistics providers — need substantiation beyond purchased offsets. The actual emissions per delivery and the reduction pathway matter more than the offset receipt.

The Transition Period

Businesses have until September 27, 2026 to transition away from non-compliant carbon neutrality claims. After that date, enforcement begins. Given that removing claims from packaging requires lead time (packaging is often ordered months in advance), the practical deadline for action is now.

For a quick assessment of your website's carbon-related claims, use our Green Claims Scanner. The tool specifically flags carbon neutrality language and offset-dependent claims.