From 27 September 2026, businesses marketing products and services to EU consumers will be subject to stricter rules on claims such as “carbon neutral”, “climate neutral” and “carbon positive”. In particular, companies will no longer be able to describe a product or service as having a neutral, reduced or positive greenhouse gas impact when that claim relies on offsetting emissions outside the product’s value chain.
This does not amount to a universal ban on the words “carbon neutral”. However, it represents a significant change in how EU carbon neutral claims can be made and substantiated. Businesses selling into the EU should review their packaging, websites, advertisements and product information before the rules apply.
Is “carbon neutral” being banned in the EU?
Unfortunately (as with many of the sustainability regulations), the answer is more nuanced than a simple yes or no.
The changes come from the EU’s Directive on Empowering Consumers for the Green Transition, known as Directive (EU) 2024/825. The Directive became part of EU law in March 2024. Member States were required to incorporate it into their national laws by 27 March 2026, and the new rules will take effect from 27 September 2026.
It amends the Unfair Commercial Practices Directive by adding several greenwashing practices to the list of practices prohibited in all circumstances. One is claiming, based on greenhouse gas offsetting, that a product has a neutral, reduced or positive impact in terms of greenhouse gas emissions.
Under EU consumer law, a “product” can be a good or a service. The prohibition could therefore affect offset-based claims including:
- “Carbon-neutral delivery”
- “Climate-neutral flight”
- “Carbon-positive product”
- “CO₂-neutral service”
- “Climate compensated”
- “Net Zero product”
If one of these claims depends on buying carbon credits or supporting projects outside the product’s value chain, it will be prohibited. The quality of the credits or existence of independent certification does not remove this restriction.
What is changing for carbon neutral claims?
The new EU greenwashing rules affect messaging related to carbon in three important ways.
1. Offset-based product claims will be prohibited
A business will no longer be able to calculate the emissions associated with a product, purchase an equivalent quantity of carbon credits and then market the product to consumers as “carbon neutral”.
Businesses are not prohibited from financing carbon projects. The Directive allows companies to communicate investments in environmental initiatives, including carbon-credit projects, where that information is accurate and not misleading.
A company could, for example, explain how much it invested in a verified carbon-removal project. It should not turn that investment into a claim suggesting that buying or using its product has no climate impact.
2. Generic environmental claims face a higher threshold
The Directive also prohibits generic environmental claims where a business cannot demonstrate recognised excellent environmental performance relevant to the claim. The European Commission’s 2026 guidance on the Directive indicates that standalone terms such as “carbon neutral”, “climate neutral”, “carbon compensated” and “carbon positive” can be generic environmental claims.
Recognised excellent environmental performance has a specific meaning. It generally relates to the EU Ecolabel, officially recognised EN ISO 14024 Type I ecolabelling schemes or top environmental performance under other applicable EU legislation. A general assurance or carbon-neutrality certificate may not, by itself, meet this test.
Instead of relying on broad language, businesses should consider whether they can communicate a specific, substantiated statement explaining:
- What has been measured
- The scope and period covered
- What has legitimately been reduced
- The methodology and baseline used
- Whether carbon credits are involved
- Where supporting evidence is available
Adding more detail does not, by itself, make an environmental claim compliant. The claim must also be accurate, supported by verified and current evidence, and presented in a way that does not mislead consumers about the nature or scale of the environmental benefit.
3. Future claims will require verified plans
Claims about future environmental performance, including commitments to become carbon neutral or net zero by a particular date, must be supported by clear, objective, publicly available and verifiable commitments.
Businesses will need a detailed and realistic implementation plan with measurable, time-bound targets and the resources required to deliver them. Progress must also be regularly verified by an independent third-party expert, with the findings made available to consumers.
A statement such as “We will be carbon neutral by 2030” cannot therefore be treated as an unsupported aspiration. It needs a defined emissions boundary, interim targets, allocated resources and evidence of progress.
Can businesses still make life cycle carbon claims?
The offsetting prohibition does not apply where a neutral, reduced or positive claim is based on the actual lifecycle impact of the product within its value chain. However, the claim must still comply with other requirements under EU consumer law.
A robust Life Cycle Assessment can establish the emissions associated with raw materials, manufacturing, distribution, use and end-of-life. This evidence may support a specific claim about reduced product emissions or performance against a defined baseline.
For example, “This product has 30% lower cradle-to-gate greenhouse gas emissions than its 2023 equivalent” is more informative than “low-carbon product”. It would still require a consistent comparison, credible methodology, current evidence and a clearly explained scope.
Completing an LCA does not automatically make every environmental statement acceptable. The wording must accurately reflect the assessment’s findings without exaggerating the benefit.
Does ISO 14068 still have a role?
ISO 14068-1 remains a valuable framework for managing and demonstrating carbon neutrality. It establishes a hierarchy that prioritises greenhouse gas reductions before the use of high-quality carbon credits and requires transparent reporting.
However, following ISO 14068 does not override EU consumer law. A business may use the standard to structure its carbon management programme while still needing to reconsider how the achievement is presented in consumer-facing marketing.
There are two separate questions for businesses to consider. First, has the organisation followed a well-substantiated process to measure and reduce emissions and address any residual emissions, such as through ISO 14068? Second, is it legally permitted to communicate the outcome as a “carbon neutral” claim? Even where the underlying process is robust, a business cannot market a product or service as carbon neutral to EU consumers if that claim relies on carbon credits outside the product’s value chain.
Do the rules apply to UK businesses?
The Directive applies to business-to-consumer marketing within the EU Single Market, including relevant products and traders originating outside the EU. UK businesses selling goods or services to EU consumers should therefore review their EU-facing communications.
Business-to-business commercial practices sit outside the harmonised scope of this Directive, although other EU and national advertising rules may still apply. Businesses operating in Great Britain must also continue to follow the CMA’s Green Claims Code, which requires environmental claims to be truthful, clear and substantiated.
How should businesses prepare?
Businesses should review more than product packaging. Carbon claims can appear across websites, retailer listings, advertisements, brochures, social media, sustainability labels and product names.
A practical preparation process should include:
- Create an inventory of carbon claims. Identify uses of “carbon neutral”, “climate neutral”, “carbon positive”, “net zero” and similar terminology across EU consumer touchpoints.
- Establish what each claim covers. Separate product claims from company-level statements and current achievements from future targets.
- Identify the role of offsetting. Determine whether a claim relies on carbon credits outside the product’s value chain.
- Review the evidence. Check assessment boundaries, methodologies, comparisons, verification and the age of the data.
- Use specific evidence. Where appropriate, communicate measured reductions and progress against a defined baseline instead of using an unqualified headline claim.
- Review existing packaging. The Commission’s guidance indicates that the rules will also affect existing products already in the distribution chain. Businesses may need to cover or correct non-compliant claims.
- Introduce a claim-approval process. Sustainability, scientific, legal and marketing teams should review environmental messaging together before publication.
The Bottom Line
The new rules do not mean businesses should stop communicating climate action. They require them to communicate it with greater precision.
Measured reductions, transparent lifecycle boundaries, credible transition plans and clear disclosure of carbon-credit investments can create a stronger sustainability story than a broad claim of neutrality.
Tunley Environmental supports organisations with carbon assessments, Life Cycle Assessments, ISO 14068 and science-based green marketing reviews. We can help businesses assess the evidence behind their environmental claims and translate technical findings into transparent, verified communications aligned with green claims regulations.