For years, “carbon neutral” has been an easy climate claim to put on a product. Work out the emissions, buy enough carbon credits to match them, and any purchase could feel ecologically legitimate.
I’m pleased to say, that era has just ended in the EU.
Since 27 September 2026, businesses selling to European consumers can no longer describe a product or service as “carbon neutral”, “climate neutral”, “carbon positive”, “climate compensated” or as having a “reduced climate impact” when that claimed benefit comes from offsetting greenhouse-gas emissions outside the product’s own value chain. EU Member States had to transpose the legislation by March and apply their implementing measures from 27 September. View the Directive.
For us at C Level, this feels like a positive evolution as we’ve been saying this for a long time that neutrality is a myth (George Monbiot’s excellent Guardian piece puts it well)
Of course, carbon finance can do useful things. It can restore forest, support communities, protect ecosystems and finance carbon removals that otherwise may not happen. But buying a credit somewhere else does not travel backwards through a supply chain and remove the emissions from the product you just sold.
The market spent years allowing those two ideas to blur because “carbon neutral” was considerably easier to communicate than: we caused these emissions, and separately we funded worthwhile climate action elsewhere.
The new rules force that distinction into the open.
What changed to EU green claims rules on 27 September 2026?
Despite a wide variety of news sources claiming this comes from the European Parliament’s Green Claims Directive, this actually comes from a piece of legislation called Empowering Consumers for the Green Transition Directive, usually called EmpCo. (The separate Green Claims Directive remains a pending proposal awaiting the Council’s first-reading position).
EmpCo amends the existing Unfair Commercial Practices Directive and adds a new practice to the list of things businesses are prohibited from doing: claiming, on the basis of greenhouse-gas offsetting, that a product has a neutral, reduced or positive greenhouse-gas impact.
That is unusually direct language for European environmental regulation.
And for those of us working in carbon it has an impact in the way claims can be communicated.
A shopper reading an offset-based neutrality claim might reasonably assume that says something about the product itself, the way it was made or the environmental consequences of consuming it. In reality, the offset may have changed none of those things.
In the worst-case scenario, a truly harmful company making a lot of money could have claimed carbon neutrality and greenwashed consumers into thinking they were making an ecologically sensitive purchase.
As Vera Jourová, then European Commission Vice-President for Values and Transparency, put it: “Empowering consumers for the green transition means giving European citizens the tools to make informed choices and preventing practices such as greenwashing and early obsolescence from being used in the single market.”
Are carbon neutral and climate neutral claims now banned in the EU?
Offset-based product claims are.
The Directive itself gives examples including “climate neutral”, “CO₂ neutral certified”, “carbon positive”, “climate net zero”, “climate compensated”, “reduced climate impact” and “limited CO₂ footprint”.
Can a product still be described as carbon neutral because of its lifecycle impact?
EmpCo makes an important distinction between offsetting and the product’s actual lifecycle impact.
The Directive says the prohibition is aimed at claims based on offsetting outside the product’s value chain, rather than claims that genuinely arise from the lifecycle performance of the product itself.
That is a much harder standard than buying enough credits to match a calculated footprint.
Imagine a company comes to us and says:
“Our product causes 12kg CO₂e, so we have bought credits for 12kg and can now call it carbon neutral.”
A few years ago, a great deal of discussion might have gone into the calculation. Is it really 12kg? Were all the lifecycle stages included? Is the credit any good? Should the company buy 12kg or build in some margin?
Those questions still matter when deciding what climate action to fund. But they no longer rescue the product claim. However good the carbon credit is, it has not altered the 12kg lifecycle footprint of the product.
Now take a manufacturer that redesigns the product, changes materials, removes fossil energy from production and can substantiate a genuinely different lifecycle result.
That is a markedly different proposition because the evidence follows the thing being claimed.
Does the EU ban carbon offsetting or carbon credits?
No, and this is where I think some of the commentary risks throwing away something useful.
EmpCo explicitly says the prohibition should not prevent businesses from advertising investments in environmental initiatives, including carbon-credit projects, provided the information is not misleading and complies with EU law.
So businesses can still finance forest projects, purchase and retire carbon credits, support removals and tell customers where the money went.
In fact, once the neutrality claim disappears, there is room to say considerably more.
- Which project did you fund?
- How much went into it?
- What kind of carbon outcome is being financed?
- Has it already been issued, or is it expected in future?
- How is it monitored?
- Who is doing the work?
- What happened to the money?
What is the difference between the EU Green Claims Directive and EmpCo?
The names have become hopelessly muddled in online commentary, but they are different pieces of legislation.
EmpCo, Directive (EU) 2024/825, has been adopted. It amends existing consumer legislation, including the Unfair Commercial Practices Directive, and EU countries were required to apply their implementing measures from 27 September 2026.
The Green Claims Directive, procedure 2023/0085(COD), is a separate proposal dealing more specifically with the substantiation and communication of explicit environmental claims. It has not completed the legislative process. The European Parliament’s live procedure record still lists it as awaiting the Council’s first-reading position. View the Parliament’s procedure file).
Has the EU Green Claims Directive been withdrawn?
Not formally, according to the current official EU legislative records.
There was an extraordinary moment in June 2025 when the European Commission announced that it intended to withdraw the proposal. A planned trilogue was cancelled, and the future of the legislation became distinctly uncertain.
But intention and legislative status are not the same thing.
The Commission’s own Green Claims page currently describes the proposal as pending, while the European Parliament procedure file records it as “Awaiting Council’s 1st reading position”. The Commission’s 2026 work programme also continued to list it as pending. View the Commission’s page.
Which other environmental claims does EmpCo restrict?
“Carbon neutral” is only one part of the change.
EmpCo also takes aim at vague environmental language such as “green”, “eco-friendly”, “environmentally friendly”, “climate friendly” and similar generic claims where the business cannot demonstrate recognised excellent environmental performance relevant to the claim.
Again, I would resist the temptation to solve this with better adjectives.
If the useful fact is that your packaging contains 80% recycled plastic, say that.
“Greener packaging” sounds more attractive but tells the customer much less. Greener than what? In which respect? Over what period? Is the packaging better, or is the claim quietly bleeding into the environmental reputation of the whole product?
EmpCo also prohibits making a claim about an entire product or an entire business when the supporting environmental performance concerns only one aspect of the product or one unrepresentative company activity.
That addresses a habit we’ve seen repeatedly in sustainability communications: find the strongest environmental fact available, then allow its halo to spread across everything around it.
What are the new EU rules for future net-zero and climate claims?
EmpCo now makes it harder to rely on a distant environmental promise.
Claims about future environmental performance need to rest on clear, objective, publicly available and verifiable commitments. The Directive requires a detailed and realistic implementation plan, measurable and time-bound targets, the resources needed to achieve them and regular verification by an independent third-party expert whose findings are available to consumers.
What should Shopify stores change after the EU carbon-neutral claim ban?
Shopify is an area we’ve quite involved with at the moment. For an ecommerce brand, I would start with the storefront rather than the sustainability strategy.
We recommend you search the parts of the site a customer actually sees for wording such as “carbon neutral”, “climate neutral”, “carbon positive”, “climate positive”, “CO₂ neutral”, “climate compensated”, “carbon-neutral shipping”, “carbon-neutral delivery” and “make my order carbon neutral”.
Then find out what sits underneath each phrase.
On Shopify stores, that may take more digging than expected. A claim can have arrived through an app installed three years ago, a theme block nobody remembers, an old cart badge, a shipping widget, a transactional email or a sustainability page written by an agency that no longer works with the company.
You will certain need to remove lines like “Carbon-neutral shipping on every order” if you’re shipping to the EU.
Can Shopify stores still use Shopify Planet, EcoCart or other carbon apps?
Potentially, yes athough many of them appear not to have caught up with the legislation.
The legislation does not make an app unlawful simply because money flows through it into carbon removals, carbon credits or another environmental activity.
It’s also unclear how aggressively the EU will pursue outdated claims, or what their resources are for doing so. That said, now is a good time for brands to tighten up their wording or indeed their APP choices. Instead of saying ‘carbon neutral’, we recommend saying simply what happens.
If 1% of sales goes to climate projects, say 1%.
If the company bought 500 credits, say 500.
If they came from a particular project, name the project.
These are less perfect soundbites than a simple claim of neutrality. But also closer to what responsible carbon buying has always required.
How C Level’s Climate Climate Counts APP approaches EU green claims
This is one reason we built Climate Counts around a contribution rather than around the fiction that an individual purchase can be made environmentally clean by attaching a credit to it.
A merchant chooses a percentage of eligible sales to put towards climate projects and can set a monthly cap. The customer is not charged a separate donation at checkout. The balance builds, credits are purchased, and the retirement evidence is retained.
The useful sentence is therefore something like:
“We put 1% of eligible sales into climate projects.”
Climate Counts is free to install on Shopify.
View Climate Counts on the Shopify App Store
EU Green Claims Directive 2026 FAQs
The Green Claims Directive is a separate proposed EU law intended to regulate how explicit environmental claims are substantiated and communicated. As of September 2026 it has not completed the legislative process and remains recorded as pending.
The relevant legislation is Directive (EU) 2024/825, the Empowering Consumers for the Green Transition Directive, or EmpCo. It amends the existing Unfair Commercial Practices Directive.
Member States had to transpose EmpCo by 27 March 2026 and apply their implementing measures from 27 September 2026.
No. Businesses can still invest in environmental initiatives and carbon-credit projects. What the new rule prohibits is using greenhouse-gas offsetting to claim that a product has a neutral, reduced or positive greenhouse-gas impact.
Not when the claim depends on offsetting greenhouse-gas emissions outside the product’s value chain. EmpCo distinguishes those claims from claims genuinely based on the product’s own lifecycle impact.
No. The separate Green Claims Directive proposal remains in the legislative process.
The Commission announced in June 2025 that it intended to withdraw the proposal, but the current European Parliament and Commission records continue to show it as pending rather than formally withdrawn.
Generic environmental claims such as “green” and “eco-friendly” are prohibited where the trader cannot demonstrate recognised excellent environmental performance relevant to the claim. The precise issue is therefore not simply the presence of the word but whether the claim meets the conditions set by the legislation.
They can be, but future environmental-performance claims now require much more behind them: a detailed and realistic implementation plan, measurable and time-bound targets, appropriate resources and regular independent verification.
Sources and methodology
The legal texts and the legislative record were checked on 29 September 2026. This article explains the rules; it is not legal advice on any particular claim.
- Directive (EU) 2024/825, Empowering Consumers for the Green Transition. Source for Annex I points 4a, 4b and 4c, the examples of offset-based and generic claims (recitals 9 and 12), the rule on future environmental claims, and the dates of 27 March and 27 September 2026 (Article 4). View the Directive.
- Directive 2005/29/EC, Unfair Commercial Practices Directive. The existing consumer law that EmpCo amends. View the Directive.
- European Parliament Legislative Observatory, procedure 2023/0085(COD). Source for the status of the proposed Green Claims Directive, recorded as “Awaiting Council’s 1st reading position”. View the procedure file.
- European Commission, Green claims. Source for the Commission describing the proposal as pending. View the page.
- European Parliament Legislative Train, substantiating and communicating green claims. Source for the June 2025 withdrawal announcement, the cancelled trilogue and the proposal’s listing as pending in the Commission’s 2026 work programme. View the file.